Here's How Much It Would Cost Elon Musk To Avoid Buying Twitter

Elon Musk's Twitter purchase deal has gone through so many twists and turns now that it isn't exactly clear whether Elon Musk still truly wants to purchase the social media website at all, or if he ever really did. At least not for the full $44 billion promised to complete the sale. On May 13, over two weeks after the original announcement that the Twitter buy had successfully gone through its early stages, Elon Musk tweeted that he would prefer to put the deal on hold for the foreseeable future. According to Musk, this move was inspired by a need to discern how many spam bot accounts had access to the social media website, for reasons that could be anybody's guess, though the Tesla mogul has been a consistent detractor of unbound artificial intelligence, which could play a part of it.

Alternatively, it could be a way to drive down the price of the final sale, predicated on the idea that Musk was misled about the number of spambots that exist on the social media network. The aforementioned price-plunging tactic is far more likely, and the May 15 report published by research groups at SparkToro and Followerwonk certainly doesn't do any favors for Elon's case. The SparkToro report indicates that about 23.42% of Elon Musk's followers have set off one of 17 flags which could indicate that they are spam bot accounts themselves, and this certainly puts a wrench into Elon's claim, at least in the sense that he himself benefits from the 26.8 million spam accounts that follow him. Thus, he hasn't seriously been misled by investors on any issues that matter — unless Elon is keen on losing all of those allegedly "fake" followers during his spam bot account sweep.

There are a few other reasons why Elon Musk would want to pull out of the Twitter deal. The biggest and most seemingly obvious one is that he owns significant shares in several companies, including Space X and Tesla, which all have their own stock values that, individually, contribute greatly to Musk's net worth. It's important to note here that the $44 billion for the Twitter deal is also not fully paid yet, despite the deal going through its early-stage acquisition process, begging a question about where all that money is coming from. Time reported on May 5 that Musk is still seeking funding for the purchase, even raking in $7.1 billion in financing. That said, he probably needs to liquidate a few of his assets to make ends meet.

This is where problems with Tesla's stock value come into play. A quick visit to the NASDAQ should inform anybody of how abysmal Tesla's stock prices have become of late. What began as a bad day on April 27 has apparently turned into a downward spiral for the company, which currently has a market cap of $682.52 billion. MarketWatch reported on May 25 that Tesla stocks tend to decrease as Twitter shares tend to increase. But since Elon Musk doesn't actually own Twitter yet, and presently isn't making any cash on his unfinished deal, it's unlikely that he would be willing to throw his baby (Tesla) entirely under the bus.

There's also the possibility that Elon Musk is facing some pushback from within Twitter's board of shareholders. The Street reported on May 25 that Egon Durban, who is described as an "ally to Elon Musk," did not get re-elected in his position as a director to the board of shareholders, though Twitter CEO Parag Agrawal declined to comment any further on the matter. According to a regulatory filing with the SEC, Durban tendered his resignation from the board after failing to get the required number of votes from shareholders. The board, in turn, rejected Durban's resignation "in connection with Mr. Durban's agreement to reduce his board service commitment to no more than five public company boards by May 25, 2023."

So, what is Elon Musk supposed to do if he simply wants to break out of the Twitter purchase entirely? According to speculation by Reuters on May 20, pressing the eject button would only really strip about $5 billion of value from Musk's personal coffers. It's not unreasonable to expect Musk to pay the stipulated $1 billion break fee, which would make everything a bit smoother on his exit.

The speculation coincides with another story about Musk paying his way out of danger, though it's not directly related to the Twitter purchase. Insider delivered a report on May 19 that details a story of one SpaceX flight attendant who accused Musk of sexual misconduct aboard one of SpaceX's corporate jets in 2016. The nitty-gritty details of the accusation are embedded in the report, but Musk supposedly paid $250,000 to settle the case and silence the flight attendant. In an email to Insider, Musk called the story a "politically motivated hit piece," before he evidently stopped communicating with Insider about the accusation.

On May 25, Twitter co-founder and former CEO Jack Dorsey officially left the Twitter board of directors, signaling what's expected to be his last major business tie with the group. This announcement was not entirely unexpected, as Dorsey outlined his plan of exit in November 2021, when he first announced he'd be resigning as CEO of Twitter. 

It's highly unlikely Musk's acquisition of Twitter will reach any sort of conclusion without a few more twists and turns along the way. One of the most famous and outspoken personalities in the world today purchasing one of the most widely-used and important social networks ever made makes for a perfect storm of complications and unforeseen obstacles.