Yahoo Finance Live’s Julie Hyman discusses Twitter shares amid Elon Musk’s tweet stating that his Twitter acquisition is on hold.
JULIE HYMAN: Elon Musk announcing that the Twitter deal is on hold via Twitter, of course. In a tweet, Musk said, Twitter deal's temporarily on hold pending details supporting calculation that spam fake accounts do, indeed, represent less than 5% of users. The Tesla CEO did follow that up, saying he's still committed to an acquisition.
He did that a little bit later, though, so he let us all stew for a while, and then said, I'm still committed to acquisition. But Twitter does need a dislike button for that first tweet. Shares of the company dipped following the news, and they're now off by some 11 and 1/2%. They're not down as much as they were initially, by the way, after he sent the first tweet. You know--
BRIAN SOZZI: I liked your tweet to Elon.
JULIE HYMAN: What was my tweet? Which one?
BRIAN SOZZI: If he's going to-- if he's trying to bring the price down a little bit.
JULIE HYMAN: Yeah, I mean, this does seem like-- there are so many things that jumped into my brain following seeing that first tweet. And the first impression was that he is trying to jawbone the price downward by making it seem as though maybe he would walk away from the deal, or maybe there's something sort of more nefarious going on at Twitter that they did come out with a filing several weeks ago, by the way-- this is not fresh information-- saying that 5% of the accounts might be bots. But he is now questioning that number.
BRAD SMITH: But that was the entirety of his pitch as well, is that he could save Twitter by monetizing it, by being able to eradicate the bots by making sure that you're actually making it possible to know that you're engaging with a real person on the other side of that NFT avatar that somebody may have on their account. And for all of those measures, he's got to know what he's basically taking on with this $44 billion deal.
But by trying to get the price lower, I mean, I'm still trying to wrap my head around that, quite frankly. But I think going forward from here, any type of Twitter movement that we do see, it's going to have continued impact on Tesla shares as well, as, of course, we know so much of the funding is really coming from his position, his stake that he has in Tesla to really frontload this deal.
BRIAN SOZZI: Right on. Look, Elon's right here. I spent some time digging into the Twitter annual report. And they do note that they performed an internal review of a sample of accounts to ultimately come to that 5% estimate of monthly daily active users. They did that in the fourth quarter, so he's right on that account.
And then Twitter goes on to say, in making this determination, we applied significant judgment to ultimately come to the conclusion that it's not more than 5%. Well, do you really trust Twitter? I mean, this has been a terrible-- terribly run company since the IPO. So Elon, I think, is right to question this. Why does he want a business with a lot more fake accounts that may not be able to make as much money as he's paying for?
JULIE HYMAN: You're just baiting me this morning. First of all, you do your due diligence before you agree to buy a company, not after. That's how it works!
BRIAN SOZZI: But you have to think--
JULIE HYMAN: That's how it works. In a normal universe, that's how it works. In a normal universe, you don't tweet about putting a deal on hold. You file it with the SEC. This is, again, Elon Musk doing things his own way with no regard for any consequences of any kind.
BRIAN SOZZI: What's wrong with it? He's putting his own money on the line here.
JULIE HYMAN: Well, first of all, he should have filed with the SEC.
BRIAN SOZZI: Why?
JULIE HYMAN: It's against securities law. Because he's saying he's putting the acquisition on hold. What do you mean, why? That's the way it works!
BRAD SMITH: Do you think he's doing any of this intentionally now to basically put off the deal?
JULIE HYMAN: Who the hell knows?
BRIAN SOZZI: Well, he didn't say the deal was off.
JULIE HYMAN: Like, who knows, right? So it's really interesting because you see him doing these things at what-- presumably, if he's on the West Coast, he's doing these things in the wee hours, right? Who knows?
BRAD SMITH: 6:00 AM there now.
JULIE HYMAN: Right, so I don't-- to try to understand his motivations, I think, is a fool's game. Yes, we can say he's trying to get the price down, that that maybe that's what it is. Maybe he's just up late at night, going through the numbers. And just on a whim--
BRIAN SOZZI: But he is right.
JULIE HYMAN: I have no idea.
BRIAN SOZZI: He is right. Whether the format he did this is correct or not, I hear your point, Julie. But he is right to question this number. What type of calculations did they use to arrive at this 5% number? Is it really over 5%? It's something that he should get more clarity on.
BRAD SMITH: The funny thing about all of this is that he was tweeting just yesterday about politics and the decision to bring Trump back onto the platform, if that would happen. But he was actually talking about Biden, saying that his mistake is that he thinks he was elected to transform the country, but actually, everyone just wanted less drama. That's also the case on Twitter. We just want less drama, especially when it's from the richest person in the world, too.
JULIE HYMAN: Yeah, maybe he should apply that to himself.
BRAD SMITH: Exactly.
JULIE HYMAN: Just one final note on how the stock is trading. So Twitter is trading and has been trading, as though people think the deal is not going to get done. So him doing this maybe pushes it a little further in that direction, but there was already this supposition on a lot of folks-- on part of a lot of folks in the market.
Secondly, if you look at the Tesla reaction, it's not just the American people who want less drama from politics. It's not maybe us as journalists-- well, I mean, drama is good for us in some ways, let's admit it. But Tesla shareholders want less drama, too. They don't want Elon taking over Twitter. That is evidenced by what Tesla shares have been doing since the Twitter deal was announced and what they're doing this morning--
BRIAN SOZZI: And employees.
JULIE HYMAN: --on the thinking that-- and employees. Great point.
BRIAN SOZZI: The employees. How could this not be completely disheartening, just to see this? How do you even go to work at Twitter? I know you're getting a big fat paycheck, but still, this has to be disheartening. You have options in this company, likely. Very disheartening. But Julie, thank you for finally taking my bait. You've been very good the past few weeks not taking it. Thanks for taking it on Friday.
JULIE HYMAN: Well, you and I agree about the employees. And Twitter's also said it's going to be cutting some employees, and a couple of high profile people yesterday lost their jobs, which, again, is an odd thing to do if you're about to be taken over, and someone's going to come in and make their own changes.
BRAD SMITH: Great point. Tesla shares down 36% since his stake was announced.
JULIE HYMAN: Yeah.