On Friday, Twitter shares fell as much as 8 percent in pre-market trading as investors anticipated last-minute uncertainties surrounding USD 44 billion acquisition of the corporation by Elon Musk.
According to the reports, the Biden administration officials are in early conversations about potentially subjecting some of Musk’s projects to national security scrutiny, including the anticipated Twitter purchase. Officials were concerned by Tesla CEO Elon Musk’s plan to buy Twitter in a deal that is partially funded by non-US investors, as well as his recent threat to cancel the Starlink service to Ukraine and also about a series of his recent tweets comprising pro-Putin regime proposals on the Ukraine conflict.
Scoop: Biden admin officials are discussing whether US should subject some of @elonmusk’s ventures to national security reviews, including his deal for Twitter Inc., and the Starlink satellite network, sources tell @SalehaMohsin and me. @BloombergTV pic.twitter.com/pZx1As8RUZ
— Jennifer Jacobs (@JenniferJJacobs) October 21, 2022
The US officials reportedly expressed further concerns regarding Musk’s plans to buy Twitter with the financial support of non-US investors, including Saudi Arabian investor Prince Alwaleed bin Talal Al Saud; Qatar Holding, which is part of the Qatar Investment Authority; and Binance, the world’s largest crypto exchange, whose holding company is incorporated in the Cayman Islands. Musk’s co-investors financial backing was valued at around $7 billion at the time.
The White House, however, denied talk of a security review. “We do not know of any such conversations,” National Security Council Spokesperson Adrienne Watson said in a statement. Also, a Treasury spokesperson commented on the situation saying that the Committee on Foreign Investment in the United States does not publicly comment on transactions that it may or may not be reviewed by law and practice.
Musk is seeking to finalize a proposed $44 billion acquisition of Twitter by a court-imposed deadline of October 28th, after which he would face legal action from the social networking site to force him to conclude the transaction.
Bloomberg reported that the Committee on Foreign Investment in the United States (CFIUS), which may assess corporate agreements and propose that the president freeze or reject a transaction, was one possible path available to the Biden administration to probe Musk’s companies.
Meanwhile, Musk responded to a tweet on Friday which cited the Bloomberg article and read, “it would be hysterical if the government banned Elon from overpaying for Twitter.” Musk reacted with a laughing emoji and the number 100, signifying his approval of the words.
💯🤣
— Elon Musk (@elonmusk) October 21, 2022
Earlier on Wednesday, Musk said that he was excited to be the owner of the company. “I’m excited about the Twitter situation. I think it’s an asset that has just sort of languished for a long time but has incredible potential, although obviously myself and the other investors are overpaying for Twitter right now”, he was quoted.
Amid this, reports have emerged claiming that Musk has big plans for the micro-blogging platform and would start with the layoffs. He informed prospective investors in his deal to acquire Twitter that he intends to slash 75 percent of Twitter’s 7,500 workers in the coming months, reducing the company’s headcount to just over 2,000. However, after the news surfaced, Twitter promptly issued a statement to employees, stating that there are no prospects for company-wide layoffs as it agreed to be acquired by Musk. Twitter General Counsel Sean Edgett sent emails to the staff on Thursday and confirmed that the firm had no plans for layoffs.
However, even if Musk’s proposal falls through, major layoffs are anticipated as Twitter’s existing management tries to eliminate $800 million from the company’s payroll by the end of next year. According to the reports, this would imply layoffs of almost 25 percent of all staff.
Musk sought to back out of his first bid to acquire Twitter in April, claiming the firm misrepresented the number of bot and spam accounts on the social media network, sparking a series of litigation between the two sides. However, early this month, the billionaire businessman modified his position and stated that he would proceed with the acquisition on the original conditions. Twitter filed a lawsuit against Musk, and a Delaware court has given both parties time until October 28 to work out on the facts and details. Otherwise, a trial will be held in November.
