Musk’s Q&A Glossed Over the Key Question About Twitter Buyout

Elon Musk’s question-and-answer session with Twitter employees today should have been good news for shareholders. After all his bluster about spambots, the fact that Musk was willing to spend an hour or so answering questions from employees suggests that he intends to go through with the acquisition. And yet afterward, Twitter shares remained stuck around the $38 price level—roughly $16 below Musk’s putative purchase price—which is around where it has traded since Musk first cast doubt on whether he’d close in mid-May. Investors remain dubious the deal is happening.

And who can blame them? For one thing, we still don’t know precisely how Musk will finance the $44 billion purchase. His argument with Twitter executives over the proportion of spambots on the platform remains unresolved, as far as we can tell. Moreover, it wouldn’t be unusual for any buyer to back out of a purchase struck before a sharp drop in asset prices had occurred. Musk, of course, had fair warning, as he negotiated the purchase well after the market had begun to turn sour. It doesn’t matter whether he should have known, though. If he wants to walk, he will walk.