Elon Musk, the wealthiest person in the world, appears to be playing a game of Monopoly in real life as he leads a number of companies in the tech space, and builds stakes in other companies and cryptocurrencies.
However, his recent acquisition of twitter (NYSE:TWTR) may not pass go and perhaps sets him up to be liable for at least 5 billion dollars.
Fallout from Twitter takeover and other controversies
Musk’s contentious bid to buy Twitter and his latest comments on politics, has cost him $49 billion over the past month, according to Fortune. Tesla’s (NASDAQ:TSLA) stock price plunged to a 10-month low on Friday following a report by Business Insider last week that Musk sexually harassed a flight attendant in 2016, a claim that the Tesla CEO denied on Twitter.
Twitter’s stock also fell to a two-month low on Wednesday last week after Musk hinted that he could back out of the Twitter deal or at least slash the deal price unless the social media platform can prove that bot accounts represent less than 5% of its users.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk said in a May 13 tweet, referencing a Reuters article about false or spam accounts that make up less than 5% of Twitter’s monetizable daily active users in the first quarter.
That tweet sent Twitter’s share price falling ~30% on May 13 against Musk’s offer price of $54.20 per share.
$5 billion exit
Musk will use a big portion of his Tesla stock to pay for his Twitter purchase, but the latest headlines surrounding the Twitter CEO knocked $390 billion off Tesla’s market value in just weeks, the news outlet noted.
Musk might also have to pay a $5 billion price for backing out of the deal, while Twitter’s value would lose around the same amount, according to Reuters.
“At the right price, both can get the difficult experience behind them,” Reuters said.
Twitter, however, reiterated that it is also committed to completing the sale to Musk on the agreed price “as promptly as practicable,” adding that it stands ready to close the deal and “enforce” the merger.