Musk Cancels Twitter Deal

chang and this has Beenenberg Technology. Coming up over the next hour, Elon Musk's escalating battle with Twitter, the fully four million on a takeover offer, possibly in Jeopanese plus TSMC, the world's watches contract chipmaker, reported better than expected Courtney revenue, signaling that electronics demand is holding up better than investors feared. And we look at today's jobs report, the US number, and how the tech sector is faring out in the numbers.

It's especially with many companies laying off employee. We had to that in but a moment, befess, let's got to check on these markets. And guys, Katie greyfa with quite a run for the mastack, quite a run, kind of a muted end to what had been you know, a week of games. You look at the SP five hundred ending down just a hair about a tenth of percent. Tech of course fared better than AZZAC one hundred, gaining about a tenth of percent. Your big outperformer was the

chip stocks. You have the Philadelphia Semiconductor's Index posting a half a percent gain even with two year yields rising almost nine basis points, just on the nose after that blockbuster jobs report. We got this moment, but let's stay on the chip because they were the outperformer today, outperformer on the week. If you look at the past four days for the socks index, up six and a half percent. Most of those games came yesterday. You had Samsung come

out report a bigger than expected jump in revenue. That's sort of changed the mute mood music for the space in a really good way. And as you can see, closing out with some really solid gains for an inte that has been struggling. And speaking of solid games, let's end on Bitcoin just for you, Caroline, and had a pretty good week, best week actually since October. But if you look year to date, as you can see, barely

made a dent. Bitcoin still down over fifty two percent, close to fifty year to date, and as you look at this, you can see that the line went up a little bit, but again barely a scratch for what's been a really bad year for bitcoin. That has been Katie, we thank you, and we've kind of been bracing ourselves

for pretty bad job support as well. If you look at the anecdotal evidence coming from some of the tech firms at least, but actually US employee has added way more jobs in June than forecast, and the unemployment rate held near a five decade low, signs of both strong demand tight labor market that will keep the federal officials pretty much tilted towards another interest rate height to the

tune of fifty or seventy five basis points. Jane's our class door drives us now to discuss the current labor market and Dania. Before we dig deep into the nuances particularly affecting the tech sector, let's talk about broad rush three two thousand jobs at it. It was good. Yeah, this is a job market that fundamentally remains healthy. We're seeing strong job gains and even though there is rain on the forecast, we still see that skies are clear for the labor market. Where did we see any weakness

of a tool? My eyes trained for example, into the participation levels that was a blemish in the report. We did see labor force participation rate comeback a little bit, and that was in large part driven by a decrease for black workers. However, I think that we shouldn't put too much stock into one month changes, and I do think that as long as the job market continues to remain tight, then we should see that labor force participation rate continue to trend upwards like it's been doing over

the last year. And what keeps it tight there for Daniel for the meantime, well, we still see that employer demand is extremely high. There over eleven million job openings, almost still two job openings for unemployed worker, and so as long as that relations ship holds, than we should continue to see more workers being drawn in from off the sidelines. And yeah, I have to say to that end, I was confused when you look at the amount of women in the workforce is still well below where it

was pre pandemic. As you say, black workers, Asian workers in particular, men not participating in the levels that they were previously. Is it childcare that's the issue. Is it lack of good pay benefits? What is it that's holding

people back. Do you think there definitely are some pandemic related factors, So when we look at childcare and elder care, which I think is especially important to keep in mind given the context of one COVID, UH, those care factors are definitely something that are still holding people out of the economy. COVID itself is still of course going on, and that that does prevent some workers from fully engaging.

But I think it's also important to remember just structurally that because of retirement, because of the aging population, we should naturally expect the way before participation rate to come down a little bit um And on top of that, we also have other factors like immigration, which has been particularly low over the last few years, holding down some

potential lay before it stains. Daniel. I'm interested in therefore going sector by sector because what we do continue to see is kind of a shifting of where we've been spending. We all want to go and have experiences, we want to go out, we want to eat. We don't want to be buying things in quite the degree that we were before. Now you're seeing that born out in terms of labor still well. I actually, I think what's really interesting about today's report was that we saw a very

broad based job gains. So even though there are concerns that consumer spending is rotating away from goods back to services, we actually saw healthy job gains in retail around about fifteen thousand jobs added after a job bosses last month, and so that's still an area of strength where we are still seeing job gains despite some of these anecdotes that we've been hearing from companies from earning calls of

weakness and retail center. Well, I mean, let's talk about some of the anecdotal evidence, because it's not just been in retail, it's been in real estate, particularly technology driven real estate. We've seen the likes of Game Stop saying that the letting go of workers. I mean, I know

these are very tiny pools of labor. But then you have a headline that comes from the information that says Oracle is discussing laying off thousands of workers as they look to cut you know, about a billion dollars in terms of costs. Are we going to brace ourselves for that?

Daniel Well, I think today's jobs report is actually a little bit of a surprise because we actually saw information at twenty five thousand jobs, which was well above what you might expect given we've heard all these anecdotes, these prominent anecdotes of the layoffs, and I think what we might be seeing is that yes, there are prominent laoffs, but they might not be widespread quite yet, or at the very least many workers who are being laid off are able to get up back on their feet pretty

quickly and find other roles. Certainly, what we've been hearing anecdotally is that maybe candidates have two job offers as opposed to five job offers on the table. But the fact is is that they are still finding jobs, they are still being hired, and what about the wages that they're seeking, Daniel, I mean, what was interesting is probably music to the federal reserves here is the wage inflation

is actually being pretty suppressed. At the moment. Wage inflation is slowing, and I think that that is a result of the slowing labor market overall, because in that example I gave, if somebody has five job offers on the table, then certainly they have a lot more leverage than somebody who only has two or somebody who only has one. In all of those cases, that person is probably getting a new job, but their wage growth potential is very

different in eutra of those scenarios. Daniel Chow, thank you so much. From Glastore. Of course, senior economists, they're talking all about some of them numbers and nuances in the numbers, particularly around the tech sector. We thank him. We start with the disclaimer. This episode of Bloomberg Technology was taped just as the news broke that Elon Musk is terminating his deal to buy Twitter. Well, let's check in on

where the big deal is or isn't going. Of course, we're talking about elo Musk's escalating battle of the boats with Twitter. It's possibly threatened to walk away from that forty four billion dollar takeover. Offers Kurt Wagner, as always, is all over the story and he joins us, now, so I mean, is it about bots? I don't think it's actually about bots. I think, as we've been talking for a couple of weeks now, Caroline, I think this

is probably about Ellen's hope of renegotiating this deal. Right, the market has changed dramatically since he agreed to buy Twitter for fifty four dollars and twenty cents per chair in late April. I imagine if he had waited even just a month, he probably could have gotten a company for a much lower price. And I get the sense that he's using this bod issue to try and you know, force a change there. Thus far, Twitter has said again and again we are holding him accountable for the price

originally talked of. But realistically this is heading for the courts, right if if indeed he does walk away. It feels that way because as you point out, Twitter really, I guess has control here in the sense that he has agreed to buy the company for this price, right he cannot simply walk a way without some type of illegal battle on Twitter seems to be saying that they're willing to do that. Now. I don't know how beneficial that is to Twitter to go spend a lot of time

and money fighting him in port. Maybe they would, you know, come to some type of settlement or agreement to lower the price without having to get there. But you know, it's in Twitter's best interest here to get the best deal for the company. And right now, that's fifty four dollars and twenty cents to share that he offered back in April. Suddenly and overall, do you think at some valley we're inspecting in a mosque to arrive. Of course Alan and Co is advising we understand on the deal.

So I mean this sort of the debate is going to come up. It's going to be lifted at some point, right. Yeah. The question is he going to be um sharing any new information? And I think he last kind of spoke publicly at the towards the end of June maybe June, and he really just kind of said stuff that he'd already been saying before. And then there was a report yesterday he probably saw from the Washington Post that that he's unhappy still with these bought figures and what Twitter

is putting out on the boat front. So it may just be re reiterating the kinds of things he's already been saying. Of course, anything he says new would be super significant, because I feel like it's been a lot of the same stuff from both sides now for a couple of weeks. What's the one thing you're looking for on this stale there fall. I guess I want to see if he's actually willing to walk away, right, I mean, he's sort of threatened it. Um. I'd say two or

even three times. Now, is he really willing to say I wish I hadn't done this deal and I'm going to force Twitter's hand to sue me. Now, of course that's that's kind of like saying I'm most looking forward to the you know, the big fight scene at the end of the movie. Of course everyone is. But I do really think that that's the main hang up here, you know, is is he really going to do what he seems to be threatening to do. Tell us a little bit about how Twitter is sparing in all of this.

It's been a tough It's been a tough go if you're an employee of Twitter for the last few months. Not only is this deal kind of hovering over everything, kind of creates a little bit of awkwardness around you know, what should we focus on? What should we build? Um But they have said they're going to do cost cuts, They did hiring freeze, they even rescinded some job operas, and then there was news yesterday that that they actually

laid off a hundred people. It's a very small percentage of the overall workforce, but you get the idea that things just aren't really moving in the growth direction for them right now, and when you add that on top of the fact that they're waiting for this deal to possibly close but possibly not. I just think it creates a really awkward situation if you're an employee at the company today and how's it thus far in any way? You know, sometimes bad news is well, all PR is good.

PR hasn't made people turned to the social media platform? Have people re engaged with it been previously before? Because it's been in the news cycle so much, you know, it's it's a good question. We'll actually probably find out because the second quarter just ended. Of course, Now last time they didn't do a full earnings, they didn't do a call. They just kind of released kind of a bare bones press release with some numbers. But it'll be interesting to see if the user growth is still there.

But you know, is this driving people to service? Like a little skeptical only because a lot of things that drive people to Twitter are major news events, um, you know, like an election for example. I'm not sure if the idea of there being an acquisition is the kind of news event that's going to bring people to the service. Just stick with us for a moment, because we've got a thirteen d as we like to get just on

a Friday when everyone's going home. But we are getting some sort of undated d coming from Elon Musk of course regarding his bid for Twitter. And understandably this is a We're going to have to read through it in real time overall, but it seems to be once again updating us previously we've had sort of how much of the deal has basically got backing from from private sources as we understand, And and amend's the schedule thirteen D initially filed by Elon Musk with the SEC on April

the five. With respect to the offer, it says amended on the eleventh or fourteenth and twenty one seven. I mean, it goes on to say all the other times that it's been amended overall, but it looks as though that they are amending adding the following the information that send a letter to Twitter formally notifying Twitter that the reporting

person is terminating their Murger agreement. Kurt. The foregoing description and the reporting person's letter is qualified in its entirety by reference to the full text of the letter, a copy of which is attached here to an exhibit p and incorporated here in for reference. The letter. Therefore, I'm going to be opening up. This is real time reporting

on Bloomberg as well at the moment. So it does seem as though, you know, MASKU has filed an amended and as I've been saying, it looks as though they are saying that they are terminating their murder agreements. So saying on July, what do you make of it? I mean, you're hearing me really out live on on air at the moment, and we're going to be rushing for every single reporter that's currently in the building. But do tell us as to whether or not this could well have

been expected overall? They say, this is actually a letter that's dated to Twitter Inc. MS Gaddin says, we refer to the agreement in section six point four. They talk about the business for any reasonable business purpose related to the consummation of the transaction. Twitter has not complied with contractual obligations. It says, for nearly two months, Mr Musk has sought the data and face information necessary to make an independent assessment of the prevalence of fake or spam

accounts on Twitter's platform. This information is fundamental to Twitter's business and financial performance, and he says, thus for thus far necessary, they say, and it's necessary to consummate the transaction. So it looks as though Mr Musk has decided that, look, we can't do it because we haven't got the right amount of information on bots. Do you see my face here? This is the base of someone who's learned, in who's learning.

You know that the last three months of work and reporting that I've done is just kind of the tip of the iceberg here. It sounds like we have more to go. But am I surprised, not only because we've seen this move in this direction, right, We were just talking about that that they haven't been able to agree on this, and that you know, Elon seems very focused on reducing the cost of this deal. I will say I didn't expect or don't did not expect him to

walk away from something entirely. Again, I thought that he would try to renegotiate. But you know, we need to go look at this further and figure out exactly what he's trying to do here. And maybe this is a first step towards a renegotiation. Right, but it certainly feels like, um, this thing that has been boiling for now a few

weeks clearly is reaching the boiling point. Right. It says, of course, his financial advisors and Morgan Stanley have been requesting critical information from Twitter as far back as May ninth. How much have the bank has been involved in all of this? How much has you know, Musk had a

lot of a lot of help and backers from elsewhere. Yeah, I mean he's had a whole lot of advisors throughout this whole process, right, I mean, these things are not It's not just Elon Musk and Paragua from Twitter sitting around hashing us out right. There are entire teams of people that are that are passing information, that have been in contact daily about this kind of stuff. I think the debate eight has been what is Twitter giving, uh,

Elen and what is is Elon demanding? I think in this case, you know, Twitter has said, hey, we're gonna give you the fire hose of tweets. We're gonna give you every public tweet on the service. Um and Ellen, clearly, as you just read, is saying that's not sufficient for for calculating what I need to calculate, which is the percentage of box. And I think the real issue here is that there they just don't see eye to eye on this body issue, and clearly that's big enough for

him to pull this offer. But again, it feels like we've been building this for some time. I have to imagine he had a little buyer's remorse, given that he made his bid in April and what we've seen, what the market has been doing the last few months since then, all of this makes it feel to me that I reiterate the same sort of question before. But this is destined for the courts, right, I think so? Right, because we as we again we were just talking about Twitter

has said repeatedly we planned to enforce the merger agreement. Right, they have come to an agreement. So even him saying, hey, I'm pulling out from this thing Twitter, my understanding is that they legally can try and force him to buy the company for the price that he agreed to. So I don't know what him. Again, need to look closer at the filing. I learned about it just as you were reading it to me on on air here. But I do think that this feels like it's headed for

a court. Just remind me of the break up fee. Yes, so there is a one billion dollar break up fee, but it's not as simple as Ellen just simply, you know, paying a billion dollars and walking away. There has to be other elements of the deal that kind of fall apart, and then he would pay that as a penalty. Again, it's not a fee that you can pay just because you feel like you wish you'd got a better deal. Cut.

I can't say what would do without you. Thank you for being there in real time on Telly to be able to read through filing with me. We thank you so much. Kut whacking. So as we say, you know Musk is terminating his Twitter merger agreement, we understand a new thirteen D being filed joyfully on a Friday afternoon, just everyone wants to head out for a well deserved rest. He says that the Twitter has failed to provide essential

information and hasn't complied with contractual obligations. All of this, of course regarding those all important bots. He says, shares of Twitter sinking and after hours join us a more Blomberg. We start with the disclaimer. This episode of Bloomberg Technology was taped just as the news broke that Elon Musk is terminating his deal to bout Twitter. Let's get back

to the breaking news. Twitter shares falling after hours after Elon Musk has filed a thirteen D amended thirteen D saying that he wants to be backing out of the offer to be buying Twitter for billion dollars. He's terminating the merger agreements, saying it's failed to provide essential information and they sometimes ignored requests for information, and pleased to

say that Alex Brinka is joining us. Now you are meant to be talking about another social media platform, and we're very pleased that you're going to take some questions on this new breaking news of Cools being dumped on a Friday afternoon annex. I'm really wonderful to have you back on with me. It's been a long time since we've spoken. Talk to us about what you're making of

this particular move. We'll sort of saw it coming, Yeah, And I was looking at this letter here and you'll excuse me having a peek at my phone because it just hit the wire. Something that I think is super interesting. Um in this letter Elon Musk and the filing is basically trying to invoke, um, some of those requirements to

break up this deal. Um. I see here he's saying, calling out the company, saying that the claim that fewer than five percent of its daily active users are false or spam accounts is dramatically understating, um, the spam accounts that are on the app. He's also, you know, there are some fighting words in here. I'm seeing him say this understatement might cause or is reasonably likely to result in a company material adverse effect in filing his terms.

That means that would be some thing that would need to be disclosed to investors. But it does seem like um Ellen is fixating on that question of how many of the users on Twitter are verified users and not boughts, and he's calling in and calling out the company here, UM making an assumption with UM you know, math that I'm not sure where it's coming from, but he's saying that this claim that fear than five percent of the daily active users are false accounts is actually not true.

So that's the biggest thing that's popping out to me here. UM that and UM the fact that he says he's asked for a lot of this information time and time again hasn't gotten it. And because of that kind of confluence of events, UM that I know you all have been covering very closely over the last few months. He's saying, those are the reasons why he is calling it quits on this potential deal, and as we know that ain't

going to be in the end of it. An experenca, thank you so much for jumping on, for getting involved in the breaking news, for calling out when some of them prevalent parts of this particular thirteen D filing and as we know as now looks as though Eleon mask is trying to back out of his offer for Twitter breaking news for this Friday. Just to add a little spice before your weekend, that Elon Musk has indeed terminated

the Twitter Murger agreement. Here is of course sending Twitter shares spiraling lower and after hours he says some of Twitter's monthly daily active user disclosures are false or indeed misleading, and he believes the spam accounts are higher than five percent.

Pleased to say, Crystal ce is with us, She's still in the building, She's willing to jump on air with us, and Crystal, of course you've been looking at some of the nuances to this, because yes, he might try and terminate this deal, but as we know, this isn't going to be as easy as all that. It's not very easy because we have reported that he during it's what, first of all, one of the quickest ever M and A processes, and it was so quick because he weighs

some of the due diligence processes. And now he's coming back and saying that he has requested information and Twitter hasn't really been flying with that, and Twitter has been saying otherwise. So the really interesting angle here is whether there must actually get to get out of this deal and whether Twitter is going to sue. So that's the next thing that we're really looking at. And like you said, it's not going to be it's not going to be as easy as he um as just you know, walking away.

Many had anticipated that the next stop is the courts, is delaware. The problem here is who's got the financial might the world fist world man in the world to drag this through the courts or indeed a Twitter that has a fujuiciary duty to its shareholders too, Yes, get the best price deal, but also not not to spend all its money on legal fees. That's exactly right. So whether Twitter is going to fight this fight or hashort of deal with Musk that remains to be seen. Interesting

to note that Sun Valley is still going on. Muss is there so as Twitter c CFO. So whether they can have some deal out during Sun Value, you know, the billionaires retreat, that could be interesting. Um. But it definitely dropped at a very unexp to time Friday afternoon, And it has to be said that to be fair to Elon Musk, yes he decided to waigh some due diligence, but he made this bet, this offer just before the market really started to hit free fall. We've actually been

falling basically ever since the top of the market in January. However, we are now very much in a bear market when it comes to the now STA. We have seen tech valuations plummet, and arguably is it's just him trying to get a better deal for himself. We've actually seen this

kind of scenario before, right. The market can turn very quickly, if you remember, in the beginning of COVID, Victoria's Secret was super close to get involved and the deal got reversed just because of how much the market has changed. So that could be one of musk argument here that the market has turned so much that is no longer the same price. Well, that to me sounds like a price recut, not an entire termination. So but he just entirely skipped that and just went to the termination in

the third D that we saw just now. The whole story is so unfolding. Could there be a deal? Could he just actually be using this as a gesture to recut the price. We don't any of that yet. We're going to keep reporting and if we have anything more, well, you see, I don't know, woman. It is a deeply

expensive game of poker. Now. We're all trying to read every single side on and overall, like the market has seen a complete drop in M and A right, Like, yes, there have been some one off enormous deals at the beginning of the year for the first half that have managed to support the overall M and A numbers coming in Microsoft Activision for example, But really we've had every

deal put on ice thus far. That's true. A lot of processes that have been going on, how to you know, either scale back or just entirely was put on ice. Like you said, Um, a couple of big deals like the b M where are really holding up the M and A volume this year so far? But we are actually seeing M and A volume significantly lower than last year. That's that last year was an outlier. Everything last year was just enormous um, you know, in terms of volume.

Whether it comes back and it will be extremely interesting. Also, this year's volume so far has hinged on Twitter and E, so it could just entirely reverse this year's M and

A outlook. Some bankers might be cross, I'm pleased to say, also with us the Crystal Ces expertise as Kurt Wagner, of course, a man who has been following this headline by headline, blow by blow D by thirteen D and it was hilarious how many amendments that have been made since that all important April date when we first learned he was going to be making that offer. But cut anything else that you've seen within thet D this time

that has caught your attention. Well, I mean, he's obviously creating a narrative here right with this letter that he sent to Twitter today day to July eight, where he says that the company did not cooperate, that he's been asking for certain data um that they you know, have made it difficult. I think the letter also included some information about Um, you know how they weren't operating under normal business conditions. We talked in the last segment, I

believe about there being some hiring freezes at Twitter. They have fired some top executives out. What's interesting about him kind of claiming that maybe Twitter was making poor business decisions while we wait for this deal to close is that I got the sense, and as I was told kind of throughout the reporting, that Ellen didn't really care too much about all that stuff. He was worried that, you know, CEO Prague Agole was still kind of running

the company as you would run a company, right. Um, So it's just funny that these things that didn't seem to be a problem are suddenly making their way into this narrative of why Twitter is at fault for why this deal is falling apart because certainly from the letter, Elon Musk is pointing the blame to the company, not saying hey, I've changed my mind. Yeah, just going back to that Ted talk that he made just at the time that he's putting in the offer, and and it

seemed to be not about profit. It was more like a move for society. He wanted to of course, this is all about free speech. This is about making this a private company rather than a public company. He was doing some sort of service. Why now does well, sort of we care about all the nuances, and it does feel ultimately he has about the price, right, And and that's what I think the answer is. I don't think that it's the nuances. I think it is that this

ultimately looked and became a bad deal for him. And so then all of a sudden, all these things that didn't matter a few weeks ago suddenly do matter because they help him in his argument that hey, I try to make a good faith deal and Twitter did not. Right. That's what we're going to start hearing. That's what we're seeing in this letter, and I imagine that will be the argument moving forward. Now. The funny thing about the body issue, right, is that Elon Musk has been complaining

about Twitter bought since before he bought the company. So he knew and has known that bots are a part of Twitter. He's had bad experience with them before, and now he's, you know, again, coming out and using the body issue as a reason to maybe walk away from the steal, or at least attempt to walk away from the steal. So you know, I really think we're going

to be parson this for a while. But my gut initial read here is that he's really trying to, you know, set up his narrative for why he thinks Twitter is responsible for this deal falling part and not him. And obviously he's doing that because if he's the one who walks away or makes this an issue, Twitter might be able to sue him to try and force him to

complete the deal. Wagner, we thank you so much for all the breaking news analysis, and Christal c as well really jumping in the share and giving us such analysis and nuance to what we are learning. Of course, that is Elon Musk is looking to terminate the deal to buy Twitter. Welcome back to Bloomberg Technology. Guess what breaking news. Elon Musk, as many had predicted, has indeed started the process of trying to terminate the deal to buy Twitter.

Here's a filed and amended thirt D and of course is calling out phil failure to provide essential information, ignoring of requests for information, in particular what he calls a number of bots that he thinks of far in excess of five percent. All of this has driven Twitter stopped down after hours and moving some other shares as well. kJ Greyfeld, I'm pleased to say still in the off with us and a Coles Cosset report to You've been looking at a lot of notes leading up to this

about probabilities whether this deal will get done. It's been interesting to watch sort of the Wall Street community talk about this deal, and Dan Ives from One Bush put it on a note yesterday actually UH saying that there's a sixty chance that this deal even gets sun. That was yesterday, of course, fall following some Washington Post reporting. They also suggested that there could be a thirty five percent chance that must go loss away from the deal altogether,

which obviously has borne out now. And obviously the bots question has been a big question regarding this deal. But there's also the share price to consider. Of course. One Musk had made this offer. It was at fifty four dollars and twenty cents a deal, UH, and that had been sort of floated in the analyst community that maybe that price is just too lofty, maybe they'll negotiate it

down more. And you can see Twitter shares right now trading around thirty four dollars fifty four cents, so that premium that dis that between the two had grown and obviously growing now and now the deal is terminated. And I also want to ask you a bit about the Tesla market reaction, one that you've pointed out on Twitter itself. I don't agree as what we're using that social media platform to brighten the knees, but remind us as to

why to Tesla might bounce on it. So the deal here is that obviously Musk is the CEO of Tesla, and so the bold case behind my you're probably seeing the shares move higher, and after hours I see Tesla shares up over one percent at the moment, higher than when I tweeted this. Is that perhaps Musk will now refocus his attention on Tesla, supposedly, you know, his main company, but as we know, I mean, Musk has always been sort of a part time CEO of Tesla. He obviously

has a lot of projects going on, including SpaceX. So we'll see if this move holds when we actually get into real trading on Monday. But interesting to see the after hours reaction. You see the knee jerk move lower and Twitter shares down over six percent. You look at Tesla shares up moving up to one and a half percent or so. Now, so that is the knee jerk Katy Greifeldt. As always, we thank you for the knee

joke reactions, the ultimate reactions. Mobidus to say also ahead of Wall Street Week, because I've very own David Weston, of course, anchor of that show, anchor of of course of the politics show for us as well, and also a man who knows an awful about the law, and this is going this is going to the courts, right. The one clear winner in this that the lawyers. They're gonna be a lot of lawyers charging a lot of money and you're gonna pay a lot of billbill hours

as a result. I mean, I think there's so much we don't know at this point. And we know that now Elon Musk says he's not going to go forward with the deal, we have to take him at his word. At the same time, he has some legal obligations he has to address. The Twitter board has been very steadfast and saying we're holding you your deal, and you have to ask, is he really getting out of it or is this a negotiation? Is this a negotiation over the one billion dollar big breakup? Fee or a lower price

is Katie just suggested for the company. Let's be honest, he would not have offered forty four billion dollars a month after we offered it. It was no longer a sensible price. And he's saying, I'm not sure I wanted at that price. We'll see, but I'll guarantee it. There's a lot of legal action coming up. And of course, David, it is the fiducial duty of the board to fight

for the highest possible price. It is also going to be incredibly costly for the board of Twitter and indeed Twitter's executive team to be paying these sort of legal fees when we know it's up against the wealthiest man in the world. Absolutely, and two other things that I add to that. A number one, there is a fairness opinion that was rendered by Goldman, Sachs and others saying this is a fair price. It's aftuly hard for the board to say, Okay, we have a fairness opinion saying

that price is the fair price. Now we're just gonna give up on it. We're not going to pursue that anymore at all. That's a tough thing to do, and the board has a pretty good legal argument, I would think, and they've been pretty steadfast. At the same time, I suspect part of what's driving Mr Musk is the board

has shown very little willingness to negotiate with him. Uh and this, as I say, and maybe he's really trying to get out of It's also possible that that in fact he's he's really trying to get a real negotiation going on. And also, David, going back to how the steel erupted, He's have it did this in in a completely bombastic way. For many a lawyer that it felt as though documents were put in too late, documents weren't filled out in the normal way, and indeed it seemed

as though he waved his rights to due diligence. Well he did, I think explicitly waves the rights and due diligence, which which says something but I say bombastic and Elon Musk is not necessarily contradictory. Right, It's not a total surprise that would work. But I think from telling you to people who know Elon Musk can have dealt with him even during this time, I think there's a good part of the almost that really did want to buy Twitter.

Maybe he still does want to buy Twitter. He generally wants to buy this company, thinks he can do something good with this company. So I don't think he was just toying with it at all. I just think he's definitely of two minds. Apparently, David Western, what would do without your legal expertise? And indeed po a man who is going to go on and talk about this a little bit, and of course your show, which we will want to be watching Wall Street Week Balance of Power

as well. Of course he can tune into David Western there. But we thank also our own Kat Grayfield for the market moves and the reactions. More for you terms of analysis to the breaking news this Friday. Of course, you know Mask backing away from that forty four billion dollar

deal for Twitter. This is Blomberg. The disastrous scenario has occurred as according to Dan Ives as well, this of course, a key analyst on all things Twitter, putting out a note as we speak from web Bush, Dan, I've saying that the termination that we've just learned Harv, you know, Mask trying to terminate the four billion dollar deal for Twitter is a disaster scenario for Twitter and it's board.

As now the company will battle Musk in an elongated court battle to recoup the deal and or the breakup fee of one billion dollars at minimum. To discuss us a little bit more amid all of this analysis, I want to bring in one Ed Ludlow, who has been on the plane back from one some valley event where absolutely everyone has been talking about this deal. You managed to read the letter that the T and D. What were people saying about this deal to you? Ed Ludlow?

You know all of the investors I was spoken to do over the last few days have been bracing for this, the idea that a termination was possible. We know about the one billion dollar reverse termination fee for both parties that you know, investors are bracing for an outcome where we have a long protracted legal battle between Elon Musk

and Twitter's board. You look through the letter that Elon Musk sent to Twitter chief legals forgetting you know, he's pretty clear he made multiple attempts to request information about how the scientific approach the Twitter's board was taking to quantifying level of box on the platform. Right, this idea that there's less from five defensive blots on the platform in terms of the user base, there's been a longstanding boiler plate the Twitter of used in regulatory filing for

many years. And so it's it's kind of weird and surprising that this was an issue from Musk in the first place, because you remember that eight or twenty when he signed a deal he waived due diligence anyway, you know, with with the news as it is breaking that he's terminated. You know, everyone I've spoken to in some valley it thinks that this is bad for Twitter as a disasters don for it, because you know, they're already cutting costs.

They've been bracing for a recession in which they're going to have the lower r and defending lower head count. And market is looking okay globally, but it's not perfect. And now they're going to have to go to court and and and get this done. And it was only yet to day carried. You remember that they reiterated they intended to follow through with the terms of the original deal.

And yet here we are, me on a jet playing you in the studio and Pelon must walking away from the deal just remind us because he talks of not enough information. He talks of multiple requests. I thought Twitter had been delivering information regarding bots. So in the letter, Elon Much's attorneys say that by Twitter's own admission in the communications they've made in the end of the beginning of May and through the June period, that the data

would incomplete. Twitter's argument they took be is that a third party be a third party and stored by the mask been a third party chosen cannot verify the level of boxing the platform, the reason being the twitters methodology for verification uses a mix of private data that they hold as the platform operator m And you know, private data is such that they're protecting the contemer and public data and only Twitter has access to that. And that's

what the discussion is around how complete that data work. Yeah, and remind us because Elon Musk is due to be fly. I think he's already arrived, has he not, or is at least due to arrive at some values, want to be giving a speech tomorrow. And the key issue is al and Co were then advisor on the deal. In some way, this is this could be an amazing meeting of all the top executives because I understand the CEO

and the CFO Twitter also at some value. Yeah, I'm just going to say out loud, I wish I was still in either or I wish I was with you in the studio, because this is the most crazy story of my career in lifetime. That al and Co. He's an advisor on the Twitter side, okay, Hanlen and Co is a long standing investment bank advisor for Twitter. And then on the other side, they've invited Elon Musk in the conference. No one saw Paragage Segal and Elon Musk

in the same space as you know. I asked med Peogle and Paragagon Roll last night if they were worried about Elon Musk walking your way. Twice they declined to answer the question, and t four hours later he walked away. So there we go. There we go, at Dudlow, We'll let you go for a moment to thank you so much for jumping on the phone with us, Ed Ludlow.

With the analysis, We've also got some expan analysis from a senior analyst on Twitter of web Bush Securities, one Dan Ice, who has a rating neutral on Twitter, who has a price of thirty eight dollars seventy nine, and it was a twelve month price target of forty three dollars. But Dan ives, you've already put out a note. You're a busy man. What do you make of this walk away? I mean, for Twitter, it's a it's a namedayor scenario

because now it's a standalone company. Start could be twenty five thirty hours on Monday and they feed just a brutal core battle with Musk, and this has been it's been a you know, a circus show in terms of from the beginning it never made sense as to why Musk going to buy it, But now the way it ends, it's just it really ends. It puts them between a rock and a hard place, and the street's gonna, you know,

really have a hard time with this. In terms of Twitter basically being viewed as damaged goods, I'm really interested in. And originally, as we were hearing when we talked to David Western that you know, forty four billion dollars was deemed fair value for overall Twitter. And as said, I think my Goldman sacks, why do you have a fair value price of thirty eight dollar seventy nine? What is it?

It was the underlying business model. How much has that eroded since Elon Musk first put in his offer, well, first off billion from the beginning never made chance and that's why there was no other bidder within miles of it. You know, we always to fair value for Twitter was somewhere in an acquisition forty and now the fake account bod issue, you will as that's really come to the forefront.

I think now this condition is the stock that's gonna have a chew in front of it because of those metrics, and also the markets changed so much sense to deal whether it's Must get in cold feet and now it really sends us onto a tail spin in terms of Twitter. And I also think Must comes out with a black eye in terms of how this was all handled. I agree and many would agree, I think in terms of like how something of news organizations view M and A offers.

But I'm interested in your take from a four billion dollar price tag. What is it about the box? I thought we sort of knew about the box and the fact that what is it that from a Twitter perspective could have been done better on that. Well, it's all about what is it five? Or is it? And I think even though the body issue has always been a black cloud over Twitter's name, you know, even if you go back over the years, now it comes down, that's

just how how big is that number? Because that's demodogation, that's the metrics. Then on the other side, others will argue Must just this is a scapegoat, it's cold feed. He basically woke up one day decided not to do it in typical must fashion. And now the knives will be sharpened going into what's just going to be a

Game of Thrones core battle. We currently understand, of course, and them and breaking news continues, but we do understand that the Twitter board is committed to closing this transaction. According to Brett Taylor, now the Twitter board is planning legal action to enforce this agreement. Dan, how much the money suck? Is that? Look? I think right now, I mean Twitter is gonna officially come out with that stands just deal. When the stocker's trainer at thirty eight bocks,

he was telling you twenty was never gonna happen. Now the question is is there still some chance that there's some renegotiation that happens. I think the will is too much at this point. And now Monday, Twitter is gonna be looking at the stock with the two in front of the probably high twenties. And now this starts to go into free fall. Tanys, we want to thank you so much, Senior Alice. Over their web, Bush Security is

already putting out an on this deal. As we say, the Twitter board is planning legal action to enforce this agreement. This is coming from Brett Taylor, Here's the chairman of Twitter's a busy man because it's also the co se here. We know, of course the salesforce. But he is on the board of Twitter, and he is saying, look, we're gonna be fighting this. Tend to close the transaction at

fifty four dollars twenty a share price. They received a notice of the purported termination from Musk, and they tend to close this transaction. They're confident in the merger pact for all of this, says Bloomberg in New York. Have a good weekend.