Elon Musk’s retreat on Twitter could be a strategy, says analyst

The suspension of the deal to buy Twitter announced by Elon Musk on the morning of this Friday (13) may indicate that the billionaire will give up the deal, as was ventilated from the beginning, but it could also be just a strategy to buy time and achieve new funders for your plan.

The bets are from Brazilian financial market experts, who were not unanimous in the analysis.

According to the billionaire, the purchase depends on confirming the number of users with spam or fake accounts on the network. Hours after the announcement, he said he was still “committed to the acquisition.”

The news, given by the businessman on the social network that he is trading, shook the market: Twitter shares plummeted on Wall Street, reaching an 18% drop in pre-opening negotiations. Musk’s main company, car maker Tesla, was up 6.9% in the early afternoon after weeks of declines.

“Only what fell on Tesla, due to the risk of Elon Musk effectively taking the eye of the owner of a business to put it in another, will generate a huge loss”, says Thiago Lobão, founder of the manager Catarina Capital. “It would not at any time compensate for an acquisition of Twitter.”

Not long ago in Silicon Valley, he says that the big belief there is in speculation “right in Elon Musk’s profile.”

The purchase would still transform its list of companies into something very heterogeneous. Twitter, a communication software, is far from the goals of Tesla, which works with energy and automobile, and SpaceX, which focuses on space transport.

“It is increasingly clear that the acquisition of Twitter was much more a speculative move than anything else,” says Lobão.

For Toro Investimentos analyst João Vítor Freitas, “he may be wanting to buy time” to find other financiers.

According to Reuters, people familiar with the deal say Musk would have agreed to pay a fine if the deal failed for reasons unrelated to funding problems.

The figure would be $1 billion, but it is unclear how such a clause would apply in the current situation.

“Such news, which leads to a devaluation, does not open up the possibility of him buying more shares in the market for a lower price. The regulatory body in the United States would see this as manipulation”, says Cesar Crivelli, a partner at Nord Research. .

Despite this, the analyst does not believe in a withdrawal.

“He has already put a lot of energy, both in terms of negotiating and getting all the lines of financing that are linked to his personal assets, to a large extent”, he says. “I think it’s more Elon Musk being himself. He likes that noise, that attention.”