Musk puts Twitter deal on hold

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LONDON — Elon Musk on Friday put his $44-billion deal for Twitter Inc temporarily on hold, sending the social media company’s shares some 20% lower in pre-market trading and on the Frankfurt stock exchange.

Below are analysts’ reactions to the announcement.

DANNI HEWSON, ANALYST, AJ BELL, HUDDERSFIELD, UK

“There were lot of investors thinking that the fact that Musk could come in and was offering a decent amount per share was providing something of a safety net at a time when tech shares are falling. The fact that there isn’t anyone else to step in does suggest that if this deal doesn’t happen, Twitter is going to have to lick its wounds and that’s going to take some time.

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“Investors just don’t know quite what this man (Elon Musk) is going to do next. He’s a total maverick. Which makes him either incredibly fantastic or a total liability, depending on which way you look.”

SUSANNAH STREETER, ANALYST, HARGREAVES LANSDOWN, BRISTOL, UK

“Musk’s Twitter takeover was always destined to be a bumpy ride, and now it risks hitting the skids over the number of fake accounts on the platform.

“There will also be questions raised over whether fake accounts are the real reason behind this delaying tactic, given that promoting free speech rather than focusing on wealth creation appeared to be his primary motivation for the takeover.

“The $44 billion price tag is huge, and it may be a strategy to row back on the amount he is prepared to pay to acquire the platform.”

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EMMANUEL CAU, HEAD OF EQUITY STRATEGY, BARCLAYS, LONDON, UK

“This adds a bit of uncertainty to the tech sector, but I think this is very company specific, I don’t see for instance any impact on European stocks.

“It keeps the pressure on the tech sector though, but my feeling is that there’s limited read-across impact to be expected. Of course, it doesn’t contribute to boost optimism for the sector.”

MICHAEL HEWSON, CHIEF MARKETS ANALYST, CMC MARKETS, LONDON

“Obviously, the markets are reacting as if he is going to pull out of the deal, otherwise why are Twitter shares down 20%. So maybe he’s (Elon Musk) paving the ground for pulling out of the deal.

“But the timing is curious given the lengths he’d gone to to secure financing for the deal. So, maybe some share holders in SpaceX and Tesla said they want his attention on his primary concerns there. This is straight out of the Musk play book, keeping shareholders on their toes.”

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NEIL CAMPLING, HEAD OF TMT RESEARCH, MIRABAUD, LONDON

“Laughable. We’d always said he may cut or run or change his tune at the 11th hour and 59 minutes and 59 seconds on the clock. It is farcical.

“He has never had the full funding – we know that from his constant attempts to get financial support – but he also held all the cards. And the Twitter board have been held hostage and only have themselves to blame for this mess. No other buyer will emerge – if he decides he is still interested he can ‘name his price’… and it won’t be higher!

“They (the board) should have seen this coming. There was a specific performance clause in the merger agreement (section 9.9), which gave Twitter the right to ‘consummate the closing (of the deal)’ but only if he had the financing… which he doesn’t.” (Reporting by Dhara Ranasinghe and Julien Ponthus, Bansari Mayur Kamdar; Compiled by Karin Strohecker; Editing by Kirsten Donovan)