Is Elon Musk considering a discount?

While the gossip classes obsess over Elon Musk’s love life (still can’t figure out whether or not he had that alleged affair or why I should care), the Electric vehicle king Tesla has been busy developing a new and risky strategy to buy Twitter – but at a significantly lower price, bankers with knowledge of the matter told The Post.

I know it’s conventional wisdom that he wants to walk away from the deal; Twitter, he says, hides football over the number of fake accounts and those annoying bots. But as we’ve already reported, bankers who know him doubt he really wants to quit.

They say he just wants to pay less after Twitter’s share price cratered with the rest of the tech sector with Tesla serving as Musk’s bargaining chip (he owns 175 million shares; you do the math).

Now, they say there’s more method to Musk’s Twitter deal madness, even as he continues to roll the dice in ways that could prove disastrous for him.

The game plan the bankers say Musk is employing is a war of attrition – play a long game and wear down the enemy until they capitulate. You essentially kill more of them than they can replace on the battlefield until they surrender.

Musk’s war with Twitter involves a battleground known as Delaware Chancery Court, the go-to place for settling corporate disputes. A trial is due to begin Oct. 17 over Twitter’s lawsuit to compel Musk to honor his initial $44 billion bid to buy the company.

Musk and Twitter are due to go to court on October 17, 2022.
AFP via Getty Images

These bankers say Musk knows chancery judges don’t look kindly on the kinds of wealthy companies who sign documents saying one thing but then try to change the terms when their financial situation suddenly changes.

Musk, you may recall, gave up on due diligence when he started acquiring shares of Twitter and then made his “best and last offer” to buy the company.

He couldn’t have been surprised by the fakes, IMHO, because he knew there were issues. In fact, he said he intended to get rid of it and turn the ubiquitous social media site into something like a successful business. (For all its influence, Twitter barely makes any money.)

Chancery judges have seen all sorts of BS’ers over the years, and they’re likely to throw Musk and his apology in the same category.

A court order could force him to pay the full $44 billion ($54.20 per share, as opposed to Twitter’s current share price of $41.61), which even for someone one as rich ($260 billion) as Musk, is a pretty big change.

The court is notorious for favoring those the judges know.
Musk will take on Twitter in the Delaware Court of Chancery.
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Bankers say Musk is prepared for this. He’s also set to appeal to the Delaware Supreme Court — and that’s where his war of attrition begins. He thinks the appeal will take around eight months or maybe a year, but with the uncertainty overhanging, Twitter’s business will continue to slump. Advertisers are already rushing amid Musk’s comments about bot issues and the impending recession.

Money will be tight, and there are so many rounds of layoffs that any tech company can run to make the numbers work before they start eating away at their infrastructure.
Musk thinks Twitter will come under pressure from shareholders to capitulate at a significantly lower price as shares slide into $30 and below, these people say. A lawyer for Musk declined to comment.

Will it work? Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware and Chancery Court expert, thinks so.
The “appeal process could take months — maybe six to eight, so it would make sense for Musk to use this time in limbo to negotiate a better deal,” he told Fox Business’ Eleanor Terrett. .

His prediction: Musk cuts the price by about 5% and Twitter agrees to a new deal. Or maybe Twitter wins the appeal, forcing Musk to cough up the full $44 billion. As Tesla shares continue to fall amid recession fears, Musk reportedly owns two declining assets.

Memo to Elon: Wars of attrition are risky.

Pelosis takes a lo$$

Looks like Paul Pelosi has finally lost some money indulging in his favorite hobby: stock trading. Perhaps that’s why his wife, Nancy, the powerful Speaker of the House of Representatives, is finally backing new legislation that would ban lawmakers and their wives from trading stocks using their obvious information advantage.

Paul and Nancy Pelosi's stock portfolio continues to grow.
Paul Pelosi finally suffered a loss on a tech trade.
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As we reported in last week’s column, Big Paul has killed it in the markets in recent years with fish trades that seemed timed to benefit from legislation with the obvious involvement of his wife. He amassed a fortune for himself and Nancy through his investment skills. They are worth over $100 million and the Speaker of the House is one of the richest people in Congress.

Last week, Paul finally suffered a loss on a tech trade for reasons that made no financial sense, as the stock’s shares will likely continue to rise with new legislation — pushed by his wife, of course — giving chipmakers billions of dollars in corporate welfare. .

Considering all the bad publicity surrounding his business, Paul might have been ashamed to sell at a loss. Likewise, Nancy might have been ashamed to support a bill that would end this ethically charged gravy train they have feasted on for years.

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