Daily Brief: Elon Musk Doesn’t Want To Buy Twitter After All

Daily Brief: Elon Musk Doesn’t Want To Buy Twitter After All

over 1 year ago3 mins

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Elon Musk said late last week that he’s pulling out of his deal to buy Twitter.

What does this mean?

If you’ve had any dating disasters recently, Elon Musk’s recent treatment of Twitter might ring some all-too-familiar bells. He first laid it on hot and heavy in April, boasting his 9% stake in the social media company before offering to buy it for $44 billion. But then Musk got a classic case of cold feet, and put the deal on hold back in May.

Now it looks like he’s really lost interest: Musk plans to pull out of the deal completely, saying Twitter violated the merger agreement by withholding the information needed to work out how many bots are on the platform – which he believes is “wildly” higher than the 5% Twitter estimated. Twitter’s shares plunged 7% after the revelation, sending them languishing back where they were before this whole debacle.

Twitter stock
Source: The Wall Street Journal

Why should I care?

Zooming in: See you in court.

Musk can’t escape scot-free, mind you: there’s a $1 billion fee simply for pulling out, but it’s likely to go much further than that. See, some legal experts doubt that Musk’s claims justify him walking away, and they say Twitter could use the terms of the agreement to sue and force him to close the deal. Musk might be in trouble, then: the company’s already planning to sue, and US courts have historically sided with sellers in similar cases.

The bigger picture: Musk might be up to something.

Still, this whole thing could just be a savvy negotiation tactic. After all, Twitter’s market value has fallen by about 30% since Musk made his offer back in April, and the company’s slowing business is making its 2023 growth targets look increasingly lofty. Musk, then, could be aiming to renegotiate the deal at a lower price if he is forced to go ahead with it – just like how LVMH bought US jeweler Tiffany & Co back in 2020.

Keep reading for our next story...

Airbus Increased Its Predictions For Global Jet Demand

Airbus image

European aircraft manufacturer Airbus upped its projections for the next 20 years of global jet demand on Monday.

What does this mean?

High energy costs have been testing airlines recently, but Airbus reckons there’s a silver lining in those turbulence-inducing clouds for manufacturers. The aircraft maker’s latest 20-year outlook predicts rising fuel prices – layered with increasingly stringent emissions standards – will motivate more airlines to buy the latest fuel-efficient aircraft to keep their costs down and stick to climate goals. And the transition’s already underway: 20% of today’s active aircraft are from the latest generation of fuel-efficient planes, up from 13% in 2019 – despite supply chains and orders lagging during the pandemic-stricken last couple of years.

And since that trend’s set to continue, Airbus increased its forecast for global jet deliveries over the next two decades to nearly 40,000. It projects that around 80% will be single-aisle planes used on short and medium-haul routes, while roughly 6% will be cargo-carrying freight aircraft.

Airbus stock
Source: Google Finance

Why should I care?

Zooming in: Asia’s airborne.

Asia has a big part to play in all this: the region’s driven demand for planes for much of the last decade, and it’s expected to make up a whopping 45% of all projected deliveries over the next 20 years. India’s set to grow the fastest, with its domestic market expected to ramp up by an average of 6.6% a year – more than triple the 2.1% average of the US. And China, meanwhile, is still on track to overtake the US as the world’s busiest aviation market in the coming years.

China orders

Zooming out: Brace yourselves.

China might be in for a bumpy ride in the meantime, mind you: the country’s battling another batch of Covid outbreaks, sending around 30 million people back under some form of movement restriction. There are now worries that entire cities could be sent back into the strict lockdowns that hurt growth last quarter, leading spooked investors to send the country’s CSI 300 index down 2% on Monday.

CSI 300
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