Things just keep getting better for Elon Musk, the eccentric billionaire that owns Tesla, Space X, the Boring Company, and who will soon own Twitter.
His acquisition of that social media giant just moved past a major hurdle; a government anti-trust waiting period required under the Hart-Scott-Rodino Antitrust Improvements (HSR) Act of 1976, with that required waiting period running out on Friday.
Under the HSR, companies must give the FTC and DOJ advance notice of transactions over a certain, large threshold so that those agencies have time to probe acquisition attempts for anti-trust issues, giving the two agencies 30 days t look into the purchase and examine its legality.
Now, despite the fact that the woke Biden DOJ likely would have loved to stop Elon from bringing free speech back onto Twitter, that time period has passed, with Fox Business reporting that neither the FTC nor the DOJ requested additional information regarding the purchase in an attempt to stop it on antitrust grounds.
However, while that government roadblock to Elon’s purchase has been bypassed, the time period running out doesn’t signify that the deal can now close, as other regulatory hurdles must be jumped over first. Fox Business, noting that, reports that:
While the expiration of the HSR waiting period has been satisfied, Twitter emphasized that the deal’s completion is still subject to remaining customary closing conditions, including shareholder and remaining applicable regulatory approvals.
The deal, which would take Twitter private at $54.20 per share, is expected to close in 2022.
Further, while Musk can likely jump over those hurdles too, the deal is currently on hold.
That’s because Musk is unconvinced that the percentage of Twitter accounts that is really bots is as low as Twitter claims it is. According to the company, which refuses to make public how exactly it reached this conclusion (CEO Parag Agrawal said doing so would be difficult due to the “critical need to use both public and private information.”), only about five percent of Twitter accounts are bots.
Musk has indicated that he believes the percentage is far higher and is looking into it, with the expectation being that he’ll decrease the purchase price offered if it turns out a larger portion of the user base is bots.
That makes sense, as Musk has indicated that he doesn’t think the American economy is headed in a good direction and the numbers involved in the purchase are absolutely massive; at the price per share he offered, about $46 billion in funding is necessary.
Initially, that included $21 billion in equity and $25.5 in loan financing from third parties, with $12.5 billion in loan financing pledged against his Telsa shares, which have tanked with the stock market. The level of loan financing was later halved with the amount of equity financing increased commensurately. He’s since pledged even more in equity financing, bringing the total portion of equity-based financing to $33.5 billion and eliminating the need for margin loan financing.
Regardless of what financing vehicle is used however, the numbers involved are massive, so it makes sense that Elon might want to shave a few billion off by proving the bot percentage is higher than Twitter initially indicated.
In any case, thanks to the deadline expiring this weekend, Elon’s now a step closer to taking over Twitter.