1 00:00:00,160 --> 00:00:03,360 Speaker 1: We start with the disclaimer. This episode of Bloomberg Technology 2 00:00:03,480 --> 00:00:06,120 Speaker 1: was taped just as the news broke that Elon Musk 3 00:00:06,400 --> 00:00:11,240 Speaker 1: is terminating his deal to buy Twitter. From the heart 4 00:00:11,280 --> 00:00:15,840 Speaker 1: of where Innovation, money and power CALLI in Silicon Valley 5 00:00:15,880 --> 00:00:33,440 Speaker 1: and beyond. This is Bloomberg Technology with Emily Jay. I'm 6 00:00:33,479 --> 00:00:36,200 Speaker 1: Caroline Hyde in New York. I'm in for a many 7 00:00:36,280 --> 00:00:38,600 Speaker 1: chang and this has Beenenberg Technology. Coming up over the 8 00:00:38,640 --> 00:00:41,680 Speaker 1: next hour, Elon Musk's escalating battle with Twitter, the fully 9 00:00:41,680 --> 00:00:45,560 Speaker 1: four million on a takeover offer, possibly in Jeopanese plus TSMC, 10 00:00:45,720 --> 00:00:49,839 Speaker 1: the world's watches contract chipmaker, reported better than expected Courtney revenue, 11 00:00:50,080 --> 00:00:53,680 Speaker 1: signaling that electronics demand is holding up better than investors feared. 12 00:00:54,120 --> 00:00:56,760 Speaker 1: And we look at today's jobs report, the US number, 13 00:00:56,880 --> 00:00:59,920 Speaker 1: and how the tech sector is faring out in the numbers. 14 00:00:59,760 --> 00:01:04,000 Speaker 1: It's especially with many companies laying off employee. We had 15 00:01:04,000 --> 00:01:05,880 Speaker 1: to that in but a moment, befess, let's got to 16 00:01:05,959 --> 00:01:08,199 Speaker 1: check on these markets. And guys, Katie greyfa with quite 17 00:01:08,200 --> 00:01:10,679 Speaker 1: a run for the mastack, quite a run, kind of 18 00:01:10,720 --> 00:01:13,039 Speaker 1: a muted end to what had been you know, a 19 00:01:13,080 --> 00:01:15,080 Speaker 1: week of games. You look at the SP five hundred 20 00:01:15,440 --> 00:01:17,800 Speaker 1: ending down just a hair about a tenth of percent. 21 00:01:18,080 --> 00:01:20,559 Speaker 1: Tech of course fared better than AZZAC one hundred, gaining 22 00:01:20,600 --> 00:01:23,480 Speaker 1: about a tenth of percent. Your big outperformer was the 23 00:01:23,520 --> 00:01:27,039 Speaker 1: chip stocks. You have the Philadelphia Semiconductor's Index posting a 24 00:01:27,040 --> 00:01:30,680 Speaker 1: half a percent gain even with two year yields rising 25 00:01:30,760 --> 00:01:33,680 Speaker 1: almost nine basis points, just on the nose after that 26 00:01:33,760 --> 00:01:36,520 Speaker 1: blockbuster jobs report. We got this moment, but let's stay 27 00:01:36,520 --> 00:01:39,840 Speaker 1: on the chip because they were the outperformer today, outperformer 28 00:01:39,959 --> 00:01:42,520 Speaker 1: on the week. If you look at the past four 29 00:01:42,640 --> 00:01:46,280 Speaker 1: days for the socks index, up six and a half percent. 30 00:01:46,360 --> 00:01:48,960 Speaker 1: Most of those games came yesterday. You had Samsung come 31 00:01:48,960 --> 00:01:52,000 Speaker 1: out report a bigger than expected jump in revenue. That's 32 00:01:52,040 --> 00:01:54,640 Speaker 1: sort of changed the mute mood music for the space 33 00:01:54,640 --> 00:01:56,720 Speaker 1: in a really good way. And as you can see, 34 00:01:56,920 --> 00:01:59,960 Speaker 1: closing out with some really solid gains for an inte 35 00:02:00,200 --> 00:02:03,160 Speaker 1: that has been struggling. And speaking of solid games, let's 36 00:02:03,280 --> 00:02:05,360 Speaker 1: end on Bitcoin just for you, Caroline, and had a 37 00:02:05,440 --> 00:02:09,400 Speaker 1: pretty good week, best week actually since October. But if 38 00:02:09,440 --> 00:02:12,200 Speaker 1: you look year to date, as you can see, barely 39 00:02:12,400 --> 00:02:16,200 Speaker 1: made a dent. Bitcoin still down over fifty two percent, 40 00:02:16,280 --> 00:02:19,200 Speaker 1: close to fifty year to date, and as you look 41 00:02:19,200 --> 00:02:21,200 Speaker 1: at this, you can see that the line went up 42 00:02:21,240 --> 00:02:23,919 Speaker 1: a little bit, but again barely a scratch for what's 43 00:02:23,919 --> 00:02:26,960 Speaker 1: been a really bad year for bitcoin. That has been Katie, 44 00:02:27,000 --> 00:02:29,680 Speaker 1: we thank you, and we've kind of been bracing ourselves 45 00:02:29,680 --> 00:02:31,919 Speaker 1: for pretty bad job support as well. If you look 46 00:02:31,919 --> 00:02:33,880 Speaker 1: at the anecdotal evidence coming from some of the tech 47 00:02:33,919 --> 00:02:36,560 Speaker 1: firms at least, but actually US employee has added way 48 00:02:36,560 --> 00:02:39,320 Speaker 1: more jobs in June than forecast, and the unemployment rate 49 00:02:39,400 --> 00:02:42,160 Speaker 1: held near a five decade low, signs of both strong 50 00:02:42,200 --> 00:02:45,520 Speaker 1: demand tight labor market that will keep the federal officials 51 00:02:45,680 --> 00:02:48,720 Speaker 1: pretty much tilted towards another interest rate height to the 52 00:02:48,760 --> 00:02:51,480 Speaker 1: tune of fifty or seventy five basis points. Jane's our 53 00:02:51,880 --> 00:02:54,200 Speaker 1: class door drives us now to discuss the current labor 54 00:02:54,240 --> 00:02:57,120 Speaker 1: market and Dania. Before we dig deep into the nuances 55 00:02:57,440 --> 00:03:00,320 Speaker 1: particularly affecting the tech sector, let's talk about broad rush 56 00:03:00,360 --> 00:03:04,360 Speaker 1: three two thousand jobs at it. It was good. Yeah, 57 00:03:04,560 --> 00:03:08,240 Speaker 1: this is a job market that fundamentally remains healthy. We're 58 00:03:08,240 --> 00:03:12,000 Speaker 1: seeing strong job gains and even though there is rain 59 00:03:12,120 --> 00:03:15,000 Speaker 1: on the forecast, we still see that skies are clear 60 00:03:15,000 --> 00:03:20,000 Speaker 1: for the labor market. Where did we see any weakness 61 00:03:20,040 --> 00:03:22,720 Speaker 1: of a tool? My eyes trained for example, into the 62 00:03:22,720 --> 00:03:26,760 Speaker 1: participation levels that was a blemish in the report. We 63 00:03:26,800 --> 00:03:29,680 Speaker 1: did see labor force participation rate comeback a little bit, 64 00:03:29,760 --> 00:03:32,160 Speaker 1: and that was in large part driven by a decrease 65 00:03:32,200 --> 00:03:35,440 Speaker 1: for black workers. However, I think that we shouldn't put 66 00:03:35,440 --> 00:03:37,800 Speaker 1: too much stock into one month changes, and I do 67 00:03:37,920 --> 00:03:39,920 Speaker 1: think that as long as the job market continues to 68 00:03:39,960 --> 00:03:43,120 Speaker 1: remain tight, then we should see that labor force participation 69 00:03:43,200 --> 00:03:45,480 Speaker 1: rate continue to trend upwards like it's been doing over 70 00:03:45,480 --> 00:03:47,600 Speaker 1: the last year. And what keeps it tight there for 71 00:03:47,760 --> 00:03:51,120 Speaker 1: Daniel for the meantime, well, we still see that employer 72 00:03:51,200 --> 00:03:54,680 Speaker 1: demand is extremely high. There over eleven million job openings, 73 00:03:54,720 --> 00:03:58,080 Speaker 1: almost still two job openings for unemployed worker, and so 74 00:03:58,120 --> 00:04:01,080 Speaker 1: as long as that relations ship holds, than we should 75 00:04:01,360 --> 00:04:04,160 Speaker 1: continue to see more workers being drawn in from off 76 00:04:04,160 --> 00:04:06,560 Speaker 1: the sidelines. And yeah, I have to say to that end, 77 00:04:06,640 --> 00:04:08,800 Speaker 1: I was confused when you look at the amount of 78 00:04:08,800 --> 00:04:11,240 Speaker 1: women in the workforce is still well below where it 79 00:04:11,360 --> 00:04:14,960 Speaker 1: was pre pandemic. As you say, black workers, Asian workers 80 00:04:14,960 --> 00:04:18,480 Speaker 1: in particular, men not participating in the levels that they 81 00:04:18,480 --> 00:04:22,120 Speaker 1: were previously. Is it childcare that's the issue. Is it 82 00:04:22,800 --> 00:04:26,200 Speaker 1: lack of good pay benefits? What is it that's holding 83 00:04:26,200 --> 00:04:29,120 Speaker 1: people back. Do you think there definitely are some pandemic 84 00:04:29,160 --> 00:04:32,280 Speaker 1: related factors, So when we look at childcare and elder care, 85 00:04:32,320 --> 00:04:34,440 Speaker 1: which I think is especially important to keep in mind 86 00:04:34,560 --> 00:04:38,039 Speaker 1: given the context of one COVID, UH, those care factors 87 00:04:38,040 --> 00:04:40,120 Speaker 1: are definitely something that are still holding people out of 88 00:04:40,200 --> 00:04:43,320 Speaker 1: the economy. COVID itself is still of course going on, 89 00:04:43,400 --> 00:04:47,120 Speaker 1: and that that does prevent some workers from fully engaging. 90 00:04:47,360 --> 00:04:49,680 Speaker 1: But I think it's also important to remember just structurally 91 00:04:50,000 --> 00:04:52,760 Speaker 1: that because of retirement, because of the aging population, we 92 00:04:52,760 --> 00:04:56,000 Speaker 1: should naturally expect the way before participation rate to come 93 00:04:56,040 --> 00:04:59,200 Speaker 1: down a little bit um And on top of that, 94 00:04:59,240 --> 00:05:01,680 Speaker 1: we also have other factors like immigration, which has been 95 00:05:01,880 --> 00:05:05,440 Speaker 1: particularly low over the last few years, holding down some 96 00:05:05,839 --> 00:05:09,360 Speaker 1: potential lay before it stains. Daniel. I'm interested in therefore 97 00:05:09,400 --> 00:05:12,080 Speaker 1: going sector by sector because what we do continue to 98 00:05:12,120 --> 00:05:14,640 Speaker 1: see is kind of a shifting of where we've been spending. 99 00:05:14,680 --> 00:05:16,320 Speaker 1: We all want to go and have experiences, we want 100 00:05:16,320 --> 00:05:17,680 Speaker 1: to go out, we want to eat. We don't want 101 00:05:17,680 --> 00:05:19,440 Speaker 1: to be buying things in quite the degree that we 102 00:05:19,440 --> 00:05:21,840 Speaker 1: were before. Now you're seeing that born out in terms 103 00:05:21,880 --> 00:05:23,920 Speaker 1: of labor still well. I actually, I think what's really 104 00:05:23,960 --> 00:05:26,800 Speaker 1: interesting about today's report was that we saw a very 105 00:05:26,839 --> 00:05:29,279 Speaker 1: broad based job gains. So even though there are concerns 106 00:05:29,320 --> 00:05:32,640 Speaker 1: that consumer spending is rotating away from goods back to services, 107 00:05:32,680 --> 00:05:35,960 Speaker 1: we actually saw healthy job gains in retail around about 108 00:05:35,960 --> 00:05:40,000 Speaker 1: fifteen thousand jobs added after a job bosses last month, 109 00:05:40,080 --> 00:05:42,440 Speaker 1: and so that's still an area of strength where we 110 00:05:42,480 --> 00:05:45,279 Speaker 1: are still seeing job gains despite some of these anecdotes 111 00:05:45,279 --> 00:05:48,159 Speaker 1: that we've been hearing from companies from earning calls of 112 00:05:48,360 --> 00:05:51,400 Speaker 1: weakness and retail center. Well, I mean, let's talk about 113 00:05:51,440 --> 00:05:53,320 Speaker 1: some of the anecdotal evidence, because it's not just been 114 00:05:53,360 --> 00:05:56,800 Speaker 1: in retail, it's been in real estate, particularly technology driven 115 00:05:56,839 --> 00:05:59,760 Speaker 1: real estate. We've seen the likes of Game Stop saying 116 00:05:59,760 --> 00:06:02,560 Speaker 1: that the letting go of workers. I mean, I know 117 00:06:02,640 --> 00:06:05,159 Speaker 1: these are very tiny pools of labor. But then you 118 00:06:05,200 --> 00:06:07,280 Speaker 1: have a headline that comes from the information that says 119 00:06:07,279 --> 00:06:10,000 Speaker 1: Oracle is discussing laying off thousands of workers as they 120 00:06:10,000 --> 00:06:12,279 Speaker 1: look to cut you know, about a billion dollars in 121 00:06:12,360 --> 00:06:15,240 Speaker 1: terms of costs. Are we going to brace ourselves for that? 122 00:06:15,400 --> 00:06:18,040 Speaker 1: Daniel Well, I think today's jobs report is actually a 123 00:06:18,080 --> 00:06:20,599 Speaker 1: little bit of a surprise because we actually saw information 124 00:06:20,640 --> 00:06:23,840 Speaker 1: at twenty five thousand jobs, which was well above what 125 00:06:23,920 --> 00:06:26,440 Speaker 1: you might expect given we've heard all these anecdotes, these 126 00:06:26,440 --> 00:06:28,920 Speaker 1: prominent anecdotes of the layoffs, and I think what we 127 00:06:29,000 --> 00:06:31,960 Speaker 1: might be seeing is that yes, there are prominent laoffs, 128 00:06:32,000 --> 00:06:34,560 Speaker 1: but they might not be widespread quite yet, or at 129 00:06:34,560 --> 00:06:36,560 Speaker 1: the very least many workers who are being laid off 130 00:06:36,600 --> 00:06:38,640 Speaker 1: are able to get up back on their feet pretty 131 00:06:38,680 --> 00:06:41,360 Speaker 1: quickly and find other roles. Certainly, what we've been hearing 132 00:06:41,360 --> 00:06:45,880 Speaker 1: anecdotally is that maybe candidates have two job offers as 133 00:06:45,920 --> 00:06:48,240 Speaker 1: opposed to five job offers on the table. But the 134 00:06:48,240 --> 00:06:50,240 Speaker 1: fact is is that they are still finding jobs, they 135 00:06:50,240 --> 00:06:53,240 Speaker 1: are still being hired, and what about the wages that 136 00:06:53,279 --> 00:06:56,360 Speaker 1: they're seeking, Daniel, I mean, what was interesting is probably 137 00:06:56,440 --> 00:06:59,920 Speaker 1: music to the federal reserves here is the wage inflation 138 00:07:00,480 --> 00:07:03,360 Speaker 1: is actually being pretty suppressed. At the moment. Wage inflation 139 00:07:03,520 --> 00:07:06,120 Speaker 1: is slowing, and I think that that is a result 140 00:07:06,160 --> 00:07:09,400 Speaker 1: of the slowing labor market overall, because in that example 141 00:07:09,440 --> 00:07:11,920 Speaker 1: I gave, if somebody has five job offers on the table, 142 00:07:11,960 --> 00:07:14,000 Speaker 1: then certainly they have a lot more leverage than somebody 143 00:07:14,000 --> 00:07:16,280 Speaker 1: who only has two or somebody who only has one. 144 00:07:16,560 --> 00:07:19,400 Speaker 1: In all of those cases, that person is probably getting 145 00:07:19,440 --> 00:07:22,960 Speaker 1: a new job, but their wage growth potential is very 146 00:07:22,960 --> 00:07:27,120 Speaker 1: different in eutra of those scenarios. Daniel Chow, thank you 147 00:07:27,200 --> 00:07:30,360 Speaker 1: so much. From Glastore. Of course, senior economists, they're talking 148 00:07:30,360 --> 00:07:34,200 Speaker 1: all about some of them numbers and nuances in the numbers, 149 00:07:34,240 --> 00:07:37,360 Speaker 1: particularly around the tech sector. We thank him. We start 150 00:07:37,400 --> 00:07:40,720 Speaker 1: with the disclaimer. This episode of Bloomberg Technology was taped 151 00:07:40,760 --> 00:07:43,920 Speaker 1: just as the news broke that Elon Musk is terminating 152 00:07:43,960 --> 00:07:54,280 Speaker 1: his deal to buy Twitter. Well, let's check in on 153 00:07:54,320 --> 00:07:56,960 Speaker 1: where the big deal is or isn't going. Of course, 154 00:07:56,960 --> 00:07:59,480 Speaker 1: we're talking about elo Musk's escalating battle of the boats 155 00:07:59,520 --> 00:08:01,960 Speaker 1: with Twitter. It's possibly threatened to walk away from that 156 00:08:02,000 --> 00:08:05,800 Speaker 1: forty four billion dollar takeover. Offers Kurt Wagner, as always, 157 00:08:05,880 --> 00:08:07,960 Speaker 1: is all over the story and he joins us, now, 158 00:08:08,480 --> 00:08:11,240 Speaker 1: so I mean, is it about bots? I don't think 159 00:08:11,240 --> 00:08:14,200 Speaker 1: it's actually about bots. I think, as we've been talking 160 00:08:14,240 --> 00:08:16,080 Speaker 1: for a couple of weeks now, Caroline, I think this 161 00:08:16,200 --> 00:08:20,120 Speaker 1: is probably about Ellen's hope of renegotiating this deal. Right, 162 00:08:20,160 --> 00:08:23,040 Speaker 1: the market has changed dramatically since he agreed to buy 163 00:08:23,120 --> 00:08:26,520 Speaker 1: Twitter for fifty four dollars and twenty cents per chair 164 00:08:26,600 --> 00:08:29,720 Speaker 1: in late April. I imagine if he had waited even 165 00:08:29,760 --> 00:08:31,440 Speaker 1: just a month, he probably could have gotten a company 166 00:08:31,480 --> 00:08:33,960 Speaker 1: for a much lower price. And I get the sense 167 00:08:33,960 --> 00:08:36,160 Speaker 1: that he's using this bod issue to try and you know, 168 00:08:36,240 --> 00:08:39,920 Speaker 1: force a change there. Thus far, Twitter has said again 169 00:08:39,960 --> 00:08:42,880 Speaker 1: and again we are holding him accountable for the price 170 00:08:42,920 --> 00:08:47,320 Speaker 1: originally talked of. But realistically this is heading for the courts, 171 00:08:47,440 --> 00:08:49,760 Speaker 1: right if if indeed he does walk away. It feels 172 00:08:49,800 --> 00:08:54,040 Speaker 1: that way because as you point out, Twitter really, I 173 00:08:54,080 --> 00:08:56,240 Speaker 1: guess has control here in the sense that he has 174 00:08:56,280 --> 00:08:58,679 Speaker 1: agreed to buy the company for this price, right he 175 00:08:58,720 --> 00:09:01,560 Speaker 1: cannot simply walk a way without some type of illegal 176 00:09:01,600 --> 00:09:04,079 Speaker 1: battle on Twitter seems to be saying that they're willing 177 00:09:04,120 --> 00:09:07,040 Speaker 1: to do that. Now. I don't know how beneficial that 178 00:09:07,120 --> 00:09:09,640 Speaker 1: is to Twitter to go spend a lot of time 179 00:09:09,640 --> 00:09:12,200 Speaker 1: and money fighting him in port. Maybe they would, you know, 180 00:09:12,280 --> 00:09:15,320 Speaker 1: come to some type of settlement or agreement to lower 181 00:09:15,360 --> 00:09:17,400 Speaker 1: the price without having to get there. But you know, 182 00:09:17,840 --> 00:09:20,240 Speaker 1: it's in Twitter's best interest here to get the best 183 00:09:20,320 --> 00:09:22,720 Speaker 1: deal for the company. And right now, that's fifty four 184 00:09:22,760 --> 00:09:24,640 Speaker 1: dollars and twenty cents to share that he offered back 185 00:09:24,679 --> 00:09:29,120 Speaker 1: in April. Suddenly and overall, do you think at some 186 00:09:29,240 --> 00:09:32,280 Speaker 1: valley we're inspecting in a mosque to arrive. Of course 187 00:09:32,320 --> 00:09:34,679 Speaker 1: Alan and Co is advising we understand on the deal. 188 00:09:34,760 --> 00:09:36,800 Speaker 1: So I mean this sort of the debate is going 189 00:09:36,840 --> 00:09:39,360 Speaker 1: to come up. It's going to be lifted at some point, right. Yeah. 190 00:09:39,440 --> 00:09:42,680 Speaker 1: The question is he going to be um sharing any 191 00:09:42,720 --> 00:09:45,079 Speaker 1: new information? And I think he last kind of spoke 192 00:09:45,120 --> 00:09:49,680 Speaker 1: publicly at the towards the end of June maybe June, 193 00:09:49,760 --> 00:09:51,400 Speaker 1: and he really just kind of said stuff that he'd 194 00:09:51,400 --> 00:09:53,320 Speaker 1: already been saying before. And then there was a report 195 00:09:53,400 --> 00:09:55,960 Speaker 1: yesterday he probably saw from the Washington Post that that 196 00:09:56,040 --> 00:09:58,760 Speaker 1: he's unhappy still with these bought figures and what Twitter 197 00:09:58,800 --> 00:10:00,800 Speaker 1: is putting out on the boat front. So it may 198 00:10:00,880 --> 00:10:03,400 Speaker 1: just be re reiterating the kinds of things he's already 199 00:10:03,400 --> 00:10:06,040 Speaker 1: been saying. Of course, anything he says new would be 200 00:10:06,080 --> 00:10:08,440 Speaker 1: super significant, because I feel like it's been a lot 201 00:10:08,440 --> 00:10:10,600 Speaker 1: of the same stuff from both sides now for a 202 00:10:10,600 --> 00:10:13,040 Speaker 1: couple of weeks. What's the one thing you're looking for 203 00:10:13,120 --> 00:10:15,560 Speaker 1: on this stale there fall. I guess I want to 204 00:10:15,600 --> 00:10:20,439 Speaker 1: see if he's actually willing to walk away, right, I mean, 205 00:10:20,480 --> 00:10:23,360 Speaker 1: he's sort of threatened it. Um. I'd say two or 206 00:10:23,400 --> 00:10:26,640 Speaker 1: even three times. Now, is he really willing to say 207 00:10:26,960 --> 00:10:29,160 Speaker 1: I wish I hadn't done this deal and I'm going 208 00:10:29,200 --> 00:10:31,440 Speaker 1: to force Twitter's hand to sue me. Now, of course 209 00:10:31,520 --> 00:10:33,960 Speaker 1: that's that's kind of like saying I'm most looking forward 210 00:10:34,000 --> 00:10:35,719 Speaker 1: to the you know, the big fight scene at the 211 00:10:35,800 --> 00:10:38,000 Speaker 1: end of the movie. Of course everyone is. But I 212 00:10:38,040 --> 00:10:40,400 Speaker 1: do really think that that's the main hang up here, 213 00:10:40,480 --> 00:10:43,160 Speaker 1: you know, is is he really going to do what 214 00:10:43,200 --> 00:10:45,720 Speaker 1: he seems to be threatening to do. Tell us a 215 00:10:45,760 --> 00:10:48,040 Speaker 1: little bit about how Twitter is sparing in all of this. 216 00:10:48,320 --> 00:10:50,200 Speaker 1: It's been a tough It's been a tough go if 217 00:10:50,240 --> 00:10:52,560 Speaker 1: you're an employee of Twitter for the last few months. 218 00:10:52,600 --> 00:10:54,960 Speaker 1: Not only is this deal kind of hovering over everything, 219 00:10:55,080 --> 00:10:57,160 Speaker 1: kind of creates a little bit of awkwardness around you know, 220 00:10:57,200 --> 00:11:00,000 Speaker 1: what should we focus on? What should we build? Um 221 00:11:00,040 --> 00:11:01,880 Speaker 1: But they have said they're going to do cost cuts, 222 00:11:01,920 --> 00:11:05,640 Speaker 1: They did hiring freeze, they even rescinded some job operas, 223 00:11:05,679 --> 00:11:07,760 Speaker 1: and then there was news yesterday that that they actually 224 00:11:07,840 --> 00:11:10,280 Speaker 1: laid off a hundred people. It's a very small percentage 225 00:11:10,280 --> 00:11:12,800 Speaker 1: of the overall workforce, but you get the idea that 226 00:11:12,880 --> 00:11:15,760 Speaker 1: things just aren't really moving in the growth direction for 227 00:11:15,800 --> 00:11:18,000 Speaker 1: them right now, and when you add that on top 228 00:11:18,080 --> 00:11:20,000 Speaker 1: of the fact that they're waiting for this deal to 229 00:11:20,400 --> 00:11:23,400 Speaker 1: possibly close but possibly not. I just think it creates 230 00:11:23,400 --> 00:11:25,400 Speaker 1: a really awkward situation if you're an employee at the 231 00:11:25,400 --> 00:11:29,280 Speaker 1: company today and how's it thus far in any way? 232 00:11:29,400 --> 00:11:32,160 Speaker 1: You know, sometimes bad news is well, all PR is good. 233 00:11:32,200 --> 00:11:35,480 Speaker 1: PR hasn't made people turned to the social media platform? 234 00:11:35,559 --> 00:11:39,160 Speaker 1: Have people re engaged with it been previously before? Because 235 00:11:39,200 --> 00:11:40,720 Speaker 1: it's been in the news cycle so much, you know, 236 00:11:40,760 --> 00:11:43,280 Speaker 1: it's it's a good question. We'll actually probably find out 237 00:11:43,960 --> 00:11:46,840 Speaker 1: because the second quarter just ended. Of course, Now last 238 00:11:46,880 --> 00:11:49,200 Speaker 1: time they didn't do a full earnings, they didn't do 239 00:11:49,200 --> 00:11:51,600 Speaker 1: a call. They just kind of released kind of a 240 00:11:51,640 --> 00:11:54,400 Speaker 1: bare bones press release with some numbers. But it'll be 241 00:11:54,440 --> 00:11:56,520 Speaker 1: interesting to see if the user growth is still there. 242 00:11:56,559 --> 00:11:58,560 Speaker 1: But you know, is this driving people to service? Like 243 00:11:59,000 --> 00:12:01,160 Speaker 1: a little skeptical only because a lot of things that 244 00:12:01,240 --> 00:12:04,600 Speaker 1: drive people to Twitter are major news events, um, you know, 245 00:12:04,679 --> 00:12:07,360 Speaker 1: like an election for example. I'm not sure if the 246 00:12:07,400 --> 00:12:09,880 Speaker 1: idea of there being an acquisition is the kind of 247 00:12:09,920 --> 00:12:11,920 Speaker 1: news event that's going to bring people to the service. 248 00:12:12,280 --> 00:12:14,360 Speaker 1: Just stick with us for a moment, because we've got 249 00:12:14,360 --> 00:12:16,840 Speaker 1: a thirteen d as we like to get just on 250 00:12:16,920 --> 00:12:19,520 Speaker 1: a Friday when everyone's going home. But we are getting 251 00:12:19,520 --> 00:12:23,600 Speaker 1: some sort of undated d coming from Elon Musk of 252 00:12:23,640 --> 00:12:28,679 Speaker 1: course regarding his bid for Twitter. And understandably this is 253 00:12:28,720 --> 00:12:30,240 Speaker 1: a We're going to have to read through it in 254 00:12:30,440 --> 00:12:33,960 Speaker 1: real time overall, but it seems to be once again 255 00:12:34,040 --> 00:12:36,679 Speaker 1: updating us previously we've had sort of how much of 256 00:12:36,720 --> 00:12:41,520 Speaker 1: the deal has basically got backing from from private sources 257 00:12:41,720 --> 00:12:45,240 Speaker 1: as we understand, And and amend's the schedule thirteen D 258 00:12:45,360 --> 00:12:48,480 Speaker 1: initially filed by Elon Musk with the SEC on April 259 00:12:48,520 --> 00:12:53,199 Speaker 1: the five. With respect to the offer, it says amended 260 00:12:53,240 --> 00:12:56,600 Speaker 1: on the eleventh or fourteenth and twenty one seven. I mean, 261 00:12:56,600 --> 00:12:58,000 Speaker 1: it goes on to say all the other times that 262 00:12:58,040 --> 00:13:00,960 Speaker 1: it's been amended overall, but it looks as though that 263 00:13:01,040 --> 00:13:04,320 Speaker 1: they are amending adding the following the information that send 264 00:13:04,320 --> 00:13:06,959 Speaker 1: a letter to Twitter formally notifying Twitter that the reporting 265 00:13:06,960 --> 00:13:10,920 Speaker 1: person is terminating their Murger agreement. Kurt. The foregoing description 266 00:13:10,920 --> 00:13:13,600 Speaker 1: and the reporting person's letter is qualified in its entirety 267 00:13:13,679 --> 00:13:15,840 Speaker 1: by reference to the full text of the letter, a 268 00:13:15,920 --> 00:13:18,679 Speaker 1: copy of which is attached here to an exhibit p 269 00:13:19,120 --> 00:13:22,920 Speaker 1: and incorporated here in for reference. The letter. Therefore, I'm 270 00:13:22,960 --> 00:13:25,080 Speaker 1: going to be opening up. This is real time reporting 271 00:13:25,080 --> 00:13:27,880 Speaker 1: on Bloomberg as well at the moment. So it does 272 00:13:27,880 --> 00:13:29,880 Speaker 1: seem as though, you know, MASKU has filed an amended 273 00:13:31,280 --> 00:13:33,920 Speaker 1: and as I've been saying, it looks as though they 274 00:13:33,960 --> 00:13:37,040 Speaker 1: are saying that they are terminating their murder agreements. So 275 00:13:37,280 --> 00:13:40,520 Speaker 1: saying on July, what do you make of it? I mean, 276 00:13:40,880 --> 00:13:43,520 Speaker 1: you're hearing me really out live on on air at 277 00:13:43,520 --> 00:13:45,200 Speaker 1: the moment, and we're going to be rushing for every 278 00:13:45,240 --> 00:13:48,040 Speaker 1: single reporter that's currently in the building. But do tell 279 00:13:48,120 --> 00:13:49,840 Speaker 1: us as to whether or not this could well have 280 00:13:49,880 --> 00:13:53,320 Speaker 1: been expected overall? They say, this is actually a letter 281 00:13:53,360 --> 00:13:56,920 Speaker 1: that's dated to Twitter Inc. MS Gaddin says, we refer 282 00:13:57,000 --> 00:13:59,559 Speaker 1: to the agreement in section six point four. They talk 283 00:13:59,640 --> 00:14:03,120 Speaker 1: about the business for any reasonable business purpose related to 284 00:14:03,160 --> 00:14:06,840 Speaker 1: the consummation of the transaction. Twitter has not complied with 285 00:14:06,920 --> 00:14:10,360 Speaker 1: contractual obligations. It says, for nearly two months, Mr Musk 286 00:14:10,360 --> 00:14:13,480 Speaker 1: has sought the data and face information necessary to make 287 00:14:13,520 --> 00:14:16,800 Speaker 1: an independent assessment of the prevalence of fake or spam 288 00:14:16,840 --> 00:14:20,880 Speaker 1: accounts on Twitter's platform. This information is fundamental to Twitter's 289 00:14:20,880 --> 00:14:24,640 Speaker 1: business and financial performance, and he says, thus for thus 290 00:14:24,680 --> 00:14:28,760 Speaker 1: far necessary, they say, and it's necessary to consummate the transaction. 291 00:14:28,840 --> 00:14:31,280 Speaker 1: So it looks as though Mr Musk has decided that, look, 292 00:14:31,360 --> 00:14:32,920 Speaker 1: we can't do it because we haven't got the right 293 00:14:32,920 --> 00:14:36,040 Speaker 1: amount of information on bots. Do you see my face here? 294 00:14:36,320 --> 00:14:40,680 Speaker 1: This is the base of someone who's learned, in who's learning. 295 00:14:41,560 --> 00:14:44,280 Speaker 1: You know that the last three months of work and 296 00:14:44,320 --> 00:14:46,960 Speaker 1: reporting that I've done is just kind of the tip 297 00:14:46,960 --> 00:14:48,520 Speaker 1: of the iceberg here. It sounds like we have more 298 00:14:48,560 --> 00:14:52,160 Speaker 1: to go. But am I surprised, not only because we've 299 00:14:52,200 --> 00:14:55,240 Speaker 1: seen this move in this direction, right, We were just 300 00:14:55,280 --> 00:14:57,920 Speaker 1: talking about that that they haven't been able to agree 301 00:14:57,960 --> 00:15:01,400 Speaker 1: on this, and that you know, Elon seems very focused 302 00:15:01,440 --> 00:15:04,640 Speaker 1: on reducing the cost of this deal. I will say 303 00:15:04,720 --> 00:15:07,520 Speaker 1: I didn't expect or don't did not expect him to 304 00:15:07,600 --> 00:15:10,400 Speaker 1: walk away from something entirely. Again, I thought that he 305 00:15:10,400 --> 00:15:13,360 Speaker 1: would try to renegotiate. But you know, we need to 306 00:15:13,360 --> 00:15:15,800 Speaker 1: go look at this further and figure out exactly what 307 00:15:15,840 --> 00:15:18,280 Speaker 1: he's trying to do here. And maybe this is a 308 00:15:18,320 --> 00:15:22,760 Speaker 1: first step towards a renegotiation. Right, but it certainly feels like, um, 309 00:15:22,800 --> 00:15:25,680 Speaker 1: this thing that has been boiling for now a few 310 00:15:25,720 --> 00:15:30,320 Speaker 1: weeks clearly is reaching the boiling point. Right. It says, 311 00:15:30,400 --> 00:15:32,960 Speaker 1: of course, his financial advisors and Morgan Stanley have been 312 00:15:32,960 --> 00:15:36,040 Speaker 1: requesting critical information from Twitter as far back as May ninth. 313 00:15:36,360 --> 00:15:38,440 Speaker 1: How much have the bank has been involved in all 314 00:15:38,480 --> 00:15:40,800 Speaker 1: of this? How much has you know, Musk had a 315 00:15:40,800 --> 00:15:44,320 Speaker 1: lot of a lot of help and backers from elsewhere. Yeah, 316 00:15:44,360 --> 00:15:46,800 Speaker 1: I mean he's had a whole lot of advisors throughout 317 00:15:46,800 --> 00:15:48,720 Speaker 1: this whole process, right, I mean, these things are not 318 00:15:48,760 --> 00:15:52,080 Speaker 1: It's not just Elon Musk and Paragua from Twitter sitting 319 00:15:52,080 --> 00:15:54,240 Speaker 1: around hashing us out right. There are entire teams of 320 00:15:54,280 --> 00:15:56,920 Speaker 1: people that are that are passing information, that have been 321 00:15:56,960 --> 00:15:59,640 Speaker 1: in contact daily about this kind of stuff. I think 322 00:15:59,640 --> 00:16:03,040 Speaker 1: the debate eight has been what is Twitter giving, uh, 323 00:16:03,240 --> 00:16:06,680 Speaker 1: Elen and what is is Elon demanding? I think in 324 00:16:06,680 --> 00:16:08,680 Speaker 1: this case, you know, Twitter has said, hey, we're gonna 325 00:16:08,680 --> 00:16:10,480 Speaker 1: give you the fire hose of tweets. We're gonna give 326 00:16:10,480 --> 00:16:14,320 Speaker 1: you every public tweet on the service. Um and Ellen, clearly, 327 00:16:14,360 --> 00:16:16,720 Speaker 1: as you just read, is saying that's not sufficient for 328 00:16:16,720 --> 00:16:19,040 Speaker 1: for calculating what I need to calculate, which is the 329 00:16:19,120 --> 00:16:21,960 Speaker 1: percentage of box. And I think the real issue here 330 00:16:22,080 --> 00:16:24,280 Speaker 1: is that there they just don't see eye to eye 331 00:16:24,280 --> 00:16:27,760 Speaker 1: on this body issue, and clearly that's big enough for 332 00:16:27,840 --> 00:16:30,920 Speaker 1: him to pull this offer. But again, it feels like 333 00:16:30,920 --> 00:16:32,720 Speaker 1: we've been building this for some time. I have to 334 00:16:32,760 --> 00:16:35,040 Speaker 1: imagine he had a little buyer's remorse, given that he 335 00:16:35,080 --> 00:16:36,880 Speaker 1: made his bid in April and what we've seen, what 336 00:16:36,920 --> 00:16:39,040 Speaker 1: the market has been doing the last few months since then, 337 00:16:40,000 --> 00:16:42,880 Speaker 1: all of this makes it feel to me that I 338 00:16:42,960 --> 00:16:44,800 Speaker 1: reiterate the same sort of question before. But this is 339 00:16:44,840 --> 00:16:48,200 Speaker 1: destined for the courts, right, I think so? Right, because 340 00:16:48,240 --> 00:16:50,360 Speaker 1: we as we again we were just talking about Twitter 341 00:16:50,400 --> 00:16:53,400 Speaker 1: has said repeatedly we planned to enforce the merger agreement. Right, 342 00:16:53,440 --> 00:16:56,320 Speaker 1: they have come to an agreement. So even him saying, hey, 343 00:16:56,360 --> 00:17:00,120 Speaker 1: I'm pulling out from this thing Twitter, my understanding is 344 00:17:00,160 --> 00:17:03,440 Speaker 1: that they legally can try and force him to buy 345 00:17:03,480 --> 00:17:05,440 Speaker 1: the company for the price that he agreed to. So 346 00:17:05,800 --> 00:17:08,520 Speaker 1: I don't know what him. Again, need to look closer 347 00:17:08,520 --> 00:17:11,119 Speaker 1: at the filing. I learned about it just as you 348 00:17:11,160 --> 00:17:13,919 Speaker 1: were reading it to me on on air here. But 349 00:17:14,040 --> 00:17:16,479 Speaker 1: I do think that this feels like it's headed for 350 00:17:16,760 --> 00:17:20,680 Speaker 1: a court. Just remind me of the break up fee. Yes, 351 00:17:20,760 --> 00:17:22,560 Speaker 1: so there is a one billion dollar break up fee, 352 00:17:22,560 --> 00:17:24,760 Speaker 1: but it's not as simple as Ellen just simply, you know, 353 00:17:24,800 --> 00:17:27,080 Speaker 1: paying a billion dollars and walking away. There has to 354 00:17:27,080 --> 00:17:29,439 Speaker 1: be other elements of the deal that kind of fall apart, 355 00:17:29,760 --> 00:17:32,480 Speaker 1: and then he would pay that as a penalty. Again, 356 00:17:32,680 --> 00:17:34,680 Speaker 1: it's not a fee that you can pay just because 357 00:17:34,720 --> 00:17:37,399 Speaker 1: you feel like you wish you'd got a better deal. Cut. 358 00:17:37,560 --> 00:17:39,520 Speaker 1: I can't say what would do without you. Thank you 359 00:17:39,560 --> 00:17:42,320 Speaker 1: for being there in real time on Telly to be 360 00:17:42,359 --> 00:17:45,359 Speaker 1: able to read through filing with me. We thank you 361 00:17:45,440 --> 00:17:48,200 Speaker 1: so much. Kut whacking. So as we say, you know 362 00:17:48,359 --> 00:17:51,240 Speaker 1: Musk is terminating his Twitter merger agreement, we understand a 363 00:17:51,280 --> 00:17:54,400 Speaker 1: new thirteen D being filed joyfully on a Friday afternoon, 364 00:17:54,400 --> 00:17:57,080 Speaker 1: just everyone wants to head out for a well deserved rest. 365 00:17:57,119 --> 00:17:59,280 Speaker 1: He says that the Twitter has failed to provide essential 366 00:17:59,320 --> 00:18:03,399 Speaker 1: information and hasn't complied with contractual obligations. All of this, 367 00:18:03,640 --> 00:18:07,399 Speaker 1: of course regarding those all important bots. He says, shares 368 00:18:07,720 --> 00:18:12,080 Speaker 1: of Twitter sinking and after hours join us a more Blomberg. 369 00:18:15,320 --> 00:18:18,560 Speaker 1: We start with the disclaimer. This episode of Bloomberg Technology 370 00:18:18,680 --> 00:18:21,320 Speaker 1: was taped just as the news broke that Elon Musk 371 00:18:21,560 --> 00:18:32,480 Speaker 1: is terminating his deal to bout Twitter. Let's get back 372 00:18:32,520 --> 00:18:35,679 Speaker 1: to the breaking news. Twitter shares falling after hours after 373 00:18:35,760 --> 00:18:39,040 Speaker 1: Elon Musk has filed a thirteen D amended thirteen D 374 00:18:39,200 --> 00:18:41,679 Speaker 1: saying that he wants to be backing out of the 375 00:18:41,800 --> 00:18:45,440 Speaker 1: offer to be buying Twitter for billion dollars. He's terminating 376 00:18:45,600 --> 00:18:48,960 Speaker 1: the merger agreements, saying it's failed to provide essential information 377 00:18:49,359 --> 00:18:53,240 Speaker 1: and they sometimes ignored requests for information, and pleased to 378 00:18:53,280 --> 00:18:55,679 Speaker 1: say that Alex Brinka is joining us. Now you are 379 00:18:55,680 --> 00:18:58,520 Speaker 1: meant to be talking about another social media platform, and 380 00:18:58,560 --> 00:19:00,760 Speaker 1: we're very pleased that you're going to take some questions 381 00:19:00,760 --> 00:19:03,960 Speaker 1: on this new breaking news of Cools being dumped on 382 00:19:03,960 --> 00:19:06,960 Speaker 1: a Friday afternoon annex. I'm really wonderful to have you 383 00:19:07,000 --> 00:19:08,960 Speaker 1: back on with me. It's been a long time since 384 00:19:08,960 --> 00:19:12,200 Speaker 1: we've spoken. Talk to us about what you're making of 385 00:19:12,320 --> 00:19:15,840 Speaker 1: this particular move. We'll sort of saw it coming, Yeah, 386 00:19:16,040 --> 00:19:17,840 Speaker 1: And I was looking at this letter here and you'll 387 00:19:17,880 --> 00:19:19,520 Speaker 1: excuse me having a peek at my phone because it 388 00:19:19,680 --> 00:19:22,720 Speaker 1: just hit the wire. Something that I think is super interesting. 389 00:19:22,920 --> 00:19:25,399 Speaker 1: Um in this letter Elon Musk and the filing is 390 00:19:25,440 --> 00:19:30,000 Speaker 1: basically trying to invoke, um, some of those requirements to 391 00:19:30,359 --> 00:19:33,639 Speaker 1: break up this deal. Um. I see here he's saying, 392 00:19:34,119 --> 00:19:37,520 Speaker 1: calling out the company, saying that the claim that fewer 393 00:19:37,560 --> 00:19:40,280 Speaker 1: than five percent of its daily active users are false 394 00:19:40,400 --> 00:19:46,160 Speaker 1: or spam accounts is dramatically understating, um, the spam accounts 395 00:19:46,160 --> 00:19:48,640 Speaker 1: that are on the app. He's also, you know, there 396 00:19:48,640 --> 00:19:51,440 Speaker 1: are some fighting words in here. I'm seeing him say 397 00:19:52,040 --> 00:19:55,560 Speaker 1: this understatement might cause or is reasonably likely to result 398 00:19:55,600 --> 00:19:59,119 Speaker 1: in a company material adverse effect in filing his terms. 399 00:19:59,119 --> 00:20:00,600 Speaker 1: That means that would be some thing that would need 400 00:20:00,640 --> 00:20:03,280 Speaker 1: to be disclosed to investors. But it does seem like 401 00:20:03,560 --> 00:20:08,240 Speaker 1: um Ellen is fixating on that question of how many 402 00:20:08,320 --> 00:20:12,080 Speaker 1: of the users on Twitter are verified users and not boughts, 403 00:20:12,320 --> 00:20:14,840 Speaker 1: and he's calling in and calling out the company here, 404 00:20:15,240 --> 00:20:19,040 Speaker 1: UM making an assumption with UM you know, math that 405 00:20:19,160 --> 00:20:21,439 Speaker 1: I'm not sure where it's coming from, but he's saying 406 00:20:21,480 --> 00:20:23,520 Speaker 1: that this claim that fear than five percent of the 407 00:20:23,560 --> 00:20:28,000 Speaker 1: daily active users are false accounts is actually not true. 408 00:20:28,280 --> 00:20:30,960 Speaker 1: So that's the biggest thing that's popping out to me here. 409 00:20:31,119 --> 00:20:34,320 Speaker 1: UM that and UM the fact that he says he's 410 00:20:34,359 --> 00:20:36,520 Speaker 1: asked for a lot of this information time and time 411 00:20:36,560 --> 00:20:40,080 Speaker 1: again hasn't gotten it. And because of that kind of 412 00:20:40,160 --> 00:20:42,679 Speaker 1: confluence of events, UM that I know you all have 413 00:20:42,720 --> 00:20:46,200 Speaker 1: been covering very closely over the last few months. He's saying, 414 00:20:46,320 --> 00:20:48,960 Speaker 1: those are the reasons why he is calling it quits 415 00:20:49,000 --> 00:20:52,119 Speaker 1: on this potential deal, and as we know that ain't 416 00:20:52,119 --> 00:20:54,240 Speaker 1: going to be in the end of it. An experenca, 417 00:20:54,440 --> 00:20:57,639 Speaker 1: thank you so much for jumping on, for getting involved 418 00:20:57,640 --> 00:20:59,680 Speaker 1: in the breaking news, for calling out when some of 419 00:20:59,720 --> 00:21:03,040 Speaker 1: them prevalent parts of this particular thirteen D filing and 420 00:21:03,080 --> 00:21:05,840 Speaker 1: as we know as now looks as though Eleon mask 421 00:21:06,080 --> 00:21:09,359 Speaker 1: is trying to back out of his offer for Twitter 422 00:21:10,960 --> 00:21:13,160 Speaker 1: breaking news for this Friday. Just to add a little 423 00:21:13,160 --> 00:21:15,879 Speaker 1: spice before your weekend, that Elon Musk has indeed terminated 424 00:21:16,119 --> 00:21:19,159 Speaker 1: the Twitter Murger agreement. Here is of course sending Twitter 425 00:21:19,160 --> 00:21:21,320 Speaker 1: shares spiraling lower and after hours he says some of 426 00:21:21,359 --> 00:21:25,719 Speaker 1: Twitter's monthly daily active user disclosures are false or indeed misleading, 427 00:21:25,800 --> 00:21:29,200 Speaker 1: and he believes the spam accounts are higher than five percent. 428 00:21:29,800 --> 00:21:32,080 Speaker 1: Pleased to say, Crystal ce is with us, She's still 429 00:21:32,080 --> 00:21:33,960 Speaker 1: in the building, She's willing to jump on air with us, 430 00:21:33,960 --> 00:21:37,080 Speaker 1: and Crystal, of course you've been looking at some of 431 00:21:37,080 --> 00:21:39,919 Speaker 1: the nuances to this, because yes, he might try and 432 00:21:40,040 --> 00:21:42,119 Speaker 1: terminate this deal, but as we know, this isn't going 433 00:21:42,160 --> 00:21:44,080 Speaker 1: to be as easy as all that. It's not very 434 00:21:44,080 --> 00:21:47,600 Speaker 1: easy because we have reported that he during it's what, 435 00:21:47,720 --> 00:21:49,680 Speaker 1: first of all, one of the quickest ever M and 436 00:21:49,720 --> 00:21:52,200 Speaker 1: A processes, and it was so quick because he weighs 437 00:21:52,240 --> 00:21:55,040 Speaker 1: some of the due diligence processes. And now he's coming 438 00:21:55,040 --> 00:21:59,080 Speaker 1: back and saying that he has requested information and Twitter 439 00:21:59,160 --> 00:22:01,760 Speaker 1: hasn't really been flying with that, and Twitter has been 440 00:22:01,800 --> 00:22:04,920 Speaker 1: saying otherwise. So the really interesting angle here is whether 441 00:22:04,920 --> 00:22:07,480 Speaker 1: there must actually get to get out of this deal 442 00:22:07,960 --> 00:22:10,240 Speaker 1: and whether Twitter is going to sue. So that's the 443 00:22:10,280 --> 00:22:13,120 Speaker 1: next thing that we're really looking at. And like you said, 444 00:22:13,160 --> 00:22:14,560 Speaker 1: it's not going to be it's not going to be 445 00:22:14,600 --> 00:22:17,080 Speaker 1: as easy as he um as just you know, walking away. 446 00:22:17,560 --> 00:22:20,800 Speaker 1: Many had anticipated that the next stop is the courts, 447 00:22:20,920 --> 00:22:24,960 Speaker 1: is delaware. The problem here is who's got the financial 448 00:22:25,080 --> 00:22:28,760 Speaker 1: might the world fist world man in the world to 449 00:22:28,840 --> 00:22:30,960 Speaker 1: drag this through the courts or indeed a Twitter that 450 00:22:30,960 --> 00:22:33,520 Speaker 1: has a fujuiciary duty to its shareholders too, Yes, get 451 00:22:33,520 --> 00:22:35,680 Speaker 1: the best price deal, but also not not to spend 452 00:22:35,680 --> 00:22:37,960 Speaker 1: all its money on legal fees. That's exactly right. So 453 00:22:38,040 --> 00:22:40,880 Speaker 1: whether Twitter is going to fight this fight or hashort 454 00:22:40,880 --> 00:22:44,840 Speaker 1: of deal with Musk that remains to be seen. Interesting 455 00:22:44,880 --> 00:22:47,600 Speaker 1: to note that Sun Valley is still going on. Muss 456 00:22:47,680 --> 00:22:51,800 Speaker 1: is there so as Twitter c CFO. So whether they 457 00:22:51,840 --> 00:22:54,560 Speaker 1: can have some deal out during Sun Value, you know, 458 00:22:54,600 --> 00:22:57,879 Speaker 1: the billionaires retreat, that could be interesting. Um. But it 459 00:22:57,920 --> 00:23:01,680 Speaker 1: definitely dropped at a very unexp to time Friday afternoon, 460 00:23:01,880 --> 00:23:03,760 Speaker 1: And it has to be said that to be fair 461 00:23:03,760 --> 00:23:06,280 Speaker 1: to Elon Musk, yes he decided to waigh some due diligence, 462 00:23:06,320 --> 00:23:09,840 Speaker 1: but he made this bet, this offer just before the 463 00:23:09,880 --> 00:23:12,280 Speaker 1: market really started to hit free fall. We've actually been 464 00:23:12,280 --> 00:23:15,280 Speaker 1: falling basically ever since the top of the market in January. However, 465 00:23:15,320 --> 00:23:17,040 Speaker 1: we are now very much in a bear market when 466 00:23:17,080 --> 00:23:18,880 Speaker 1: it comes to the now STA. We have seen tech 467 00:23:18,960 --> 00:23:23,000 Speaker 1: valuations plummet, and arguably is it's just him trying to 468 00:23:23,040 --> 00:23:26,000 Speaker 1: get a better deal for himself. We've actually seen this 469 00:23:26,080 --> 00:23:28,960 Speaker 1: kind of scenario before, right. The market can turn very quickly, 470 00:23:29,200 --> 00:23:31,680 Speaker 1: if you remember, in the beginning of COVID, Victoria's Secret 471 00:23:31,720 --> 00:23:34,240 Speaker 1: was super close to get involved and the deal got 472 00:23:34,840 --> 00:23:37,200 Speaker 1: reversed just because of how much the market has changed. 473 00:23:37,200 --> 00:23:39,760 Speaker 1: So that could be one of musk argument here that 474 00:23:39,840 --> 00:23:42,320 Speaker 1: the market has turned so much that is no longer 475 00:23:42,359 --> 00:23:44,879 Speaker 1: the same price. Well, that to me sounds like a 476 00:23:44,920 --> 00:23:48,879 Speaker 1: price recut, not an entire termination. So but he just 477 00:23:49,119 --> 00:23:51,399 Speaker 1: entirely skipped that and just went to the termination in 478 00:23:51,440 --> 00:23:53,520 Speaker 1: the third D that we saw just now. The whole 479 00:23:53,520 --> 00:23:55,680 Speaker 1: story is so unfolding. Could there be a deal? Could 480 00:23:55,720 --> 00:23:58,560 Speaker 1: he just actually be using this as a gesture to 481 00:23:58,680 --> 00:24:01,280 Speaker 1: recut the price. We don't any of that yet. We're 482 00:24:01,280 --> 00:24:03,600 Speaker 1: going to keep reporting and if we have anything more, well, 483 00:24:03,640 --> 00:24:05,880 Speaker 1: you see, I don't know, woman. It is a deeply 484 00:24:06,520 --> 00:24:09,160 Speaker 1: expensive game of poker. Now. We're all trying to read 485 00:24:09,240 --> 00:24:12,480 Speaker 1: every single side on and overall, like the market has 486 00:24:12,520 --> 00:24:15,920 Speaker 1: seen a complete drop in M and A right, Like, yes, 487 00:24:15,920 --> 00:24:17,840 Speaker 1: there have been some one off enormous deals at the 488 00:24:17,840 --> 00:24:19,600 Speaker 1: beginning of the year for the first half that have 489 00:24:19,720 --> 00:24:22,480 Speaker 1: managed to support the overall M and A numbers coming 490 00:24:22,480 --> 00:24:26,080 Speaker 1: in Microsoft Activision for example, But really we've had every 491 00:24:26,080 --> 00:24:28,240 Speaker 1: deal put on ice thus far. That's true. A lot 492 00:24:28,240 --> 00:24:31,760 Speaker 1: of processes that have been going on, how to you know, 493 00:24:31,800 --> 00:24:35,280 Speaker 1: either scale back or just entirely was put on ice. 494 00:24:35,359 --> 00:24:38,000 Speaker 1: Like you said, Um, a couple of big deals like 495 00:24:38,040 --> 00:24:39,919 Speaker 1: the b M where are really holding up the M 496 00:24:39,920 --> 00:24:41,880 Speaker 1: and A volume this year so far? But we are 497 00:24:41,920 --> 00:24:45,800 Speaker 1: actually seeing M and A volume significantly lower than last year. 498 00:24:46,160 --> 00:24:48,680 Speaker 1: That's that last year was an outlier. Everything last year 499 00:24:48,840 --> 00:24:51,480 Speaker 1: was just enormous um, you know, in terms of volume. 500 00:24:52,200 --> 00:24:56,119 Speaker 1: Whether it comes back and it will be extremely interesting. Also, 501 00:24:56,200 --> 00:24:59,800 Speaker 1: this year's volume so far has hinged on Twitter and E, 502 00:25:00,320 --> 00:25:03,280 Speaker 1: so it could just entirely reverse this year's M and 503 00:25:03,359 --> 00:25:07,160 Speaker 1: A outlook. Some bankers might be cross, I'm pleased to say, 504 00:25:07,200 --> 00:25:10,280 Speaker 1: also with us the Crystal Ces expertise as Kurt Wagner, 505 00:25:10,320 --> 00:25:13,040 Speaker 1: of course, a man who has been following this headline 506 00:25:13,040 --> 00:25:16,080 Speaker 1: by headline, blow by blow D by thirteen D and 507 00:25:16,080 --> 00:25:18,320 Speaker 1: it was hilarious how many amendments that have been made 508 00:25:18,320 --> 00:25:20,720 Speaker 1: since that all important April date when we first learned 509 00:25:20,720 --> 00:25:22,240 Speaker 1: he was going to be making that offer. But cut 510 00:25:22,280 --> 00:25:25,320 Speaker 1: anything else that you've seen within thet D this time 511 00:25:25,680 --> 00:25:28,920 Speaker 1: that has caught your attention. Well, I mean, he's obviously 512 00:25:29,840 --> 00:25:33,399 Speaker 1: creating a narrative here right with this letter that he 513 00:25:33,520 --> 00:25:37,840 Speaker 1: sent to Twitter today day to July eight, where he 514 00:25:37,960 --> 00:25:40,400 Speaker 1: says that the company did not cooperate, that he's been 515 00:25:40,440 --> 00:25:43,760 Speaker 1: asking for certain data um that they you know, have 516 00:25:43,920 --> 00:25:46,600 Speaker 1: made it difficult. I think the letter also included some 517 00:25:46,640 --> 00:25:50,080 Speaker 1: information about Um, you know how they weren't operating under 518 00:25:50,160 --> 00:25:54,760 Speaker 1: normal business conditions. We talked in the last segment, I 519 00:25:54,760 --> 00:25:57,560 Speaker 1: believe about there being some hiring freezes at Twitter. They 520 00:25:58,000 --> 00:26:02,160 Speaker 1: have fired some top executives out. What's interesting about him 521 00:26:02,280 --> 00:26:05,240 Speaker 1: kind of claiming that maybe Twitter was making poor business 522 00:26:05,280 --> 00:26:07,399 Speaker 1: decisions while we wait for this deal to close is 523 00:26:07,400 --> 00:26:10,000 Speaker 1: that I got the sense, and as I was told 524 00:26:10,080 --> 00:26:12,480 Speaker 1: kind of throughout the reporting, that Ellen didn't really care 525 00:26:12,520 --> 00:26:15,520 Speaker 1: too much about all that stuff. He was worried that, 526 00:26:15,680 --> 00:26:18,760 Speaker 1: you know, CEO Prague Agole was still kind of running 527 00:26:18,760 --> 00:26:21,880 Speaker 1: the company as you would run a company, right. Um, 528 00:26:21,960 --> 00:26:24,600 Speaker 1: So it's just funny that these things that didn't seem 529 00:26:24,640 --> 00:26:26,920 Speaker 1: to be a problem are suddenly making their way into 530 00:26:26,920 --> 00:26:30,320 Speaker 1: this narrative of why Twitter is at fault for why 531 00:26:30,359 --> 00:26:32,840 Speaker 1: this deal is falling apart because certainly from the letter, 532 00:26:32,840 --> 00:26:35,920 Speaker 1: Elon Musk is pointing the blame to the company, not 533 00:26:36,080 --> 00:26:38,760 Speaker 1: saying hey, I've changed my mind. Yeah, just going back 534 00:26:38,760 --> 00:26:40,840 Speaker 1: to that Ted talk that he made just at the 535 00:26:40,840 --> 00:26:43,240 Speaker 1: time that he's putting in the offer, and and it 536 00:26:43,280 --> 00:26:45,520 Speaker 1: seemed to be not about profit. It was more like 537 00:26:45,560 --> 00:26:47,840 Speaker 1: a move for society. He wanted to of course, this 538 00:26:47,920 --> 00:26:50,000 Speaker 1: is all about free speech. This is about making this 539 00:26:50,080 --> 00:26:53,359 Speaker 1: a private company rather than a public company. He was 540 00:26:53,440 --> 00:26:57,480 Speaker 1: doing some sort of service. Why now does well, sort 541 00:26:57,480 --> 00:26:59,200 Speaker 1: of we care about all the nuances, and it does 542 00:26:59,200 --> 00:27:02,280 Speaker 1: feel ultimately he has about the price, right, And and 543 00:27:02,320 --> 00:27:04,520 Speaker 1: that's what I think the answer is. I don't think 544 00:27:04,560 --> 00:27:07,200 Speaker 1: that it's the nuances. I think it is that this 545 00:27:07,440 --> 00:27:10,480 Speaker 1: ultimately looked and became a bad deal for him. And 546 00:27:10,520 --> 00:27:12,520 Speaker 1: so then all of a sudden, all these things that 547 00:27:12,600 --> 00:27:15,720 Speaker 1: didn't matter a few weeks ago suddenly do matter because 548 00:27:15,760 --> 00:27:19,600 Speaker 1: they help him in his argument that hey, I try 549 00:27:19,640 --> 00:27:22,000 Speaker 1: to make a good faith deal and Twitter did not. Right. 550 00:27:22,119 --> 00:27:23,880 Speaker 1: That's what we're going to start hearing. That's what we're 551 00:27:23,880 --> 00:27:26,040 Speaker 1: seeing in this letter, and I imagine that will be 552 00:27:26,080 --> 00:27:29,879 Speaker 1: the argument moving forward. Now. The funny thing about the 553 00:27:29,920 --> 00:27:33,080 Speaker 1: body issue, right, is that Elon Musk has been complaining 554 00:27:33,080 --> 00:27:36,600 Speaker 1: about Twitter bought since before he bought the company. So 555 00:27:36,720 --> 00:27:40,280 Speaker 1: he knew and has known that bots are a part 556 00:27:40,280 --> 00:27:44,080 Speaker 1: of Twitter. He's had bad experience with them before, and 557 00:27:44,160 --> 00:27:46,399 Speaker 1: now he's, you know, again, coming out and using the 558 00:27:46,400 --> 00:27:49,639 Speaker 1: body issue as a reason to maybe walk away from 559 00:27:49,680 --> 00:27:51,479 Speaker 1: the steal, or at least attempt to walk away from 560 00:27:51,520 --> 00:27:54,919 Speaker 1: the steal. So you know, I really think we're going 561 00:27:54,960 --> 00:27:57,240 Speaker 1: to be parson this for a while. But my gut 562 00:27:57,240 --> 00:27:59,960 Speaker 1: initial read here is that he's really trying to, you know, 563 00:28:00,080 --> 00:28:02,760 Speaker 1: set up his narrative for why he thinks Twitter is 564 00:28:02,800 --> 00:28:05,280 Speaker 1: responsible for this deal falling part and not him. And 565 00:28:05,359 --> 00:28:07,720 Speaker 1: obviously he's doing that because if he's the one who 566 00:28:07,720 --> 00:28:10,639 Speaker 1: walks away or makes this an issue, Twitter might be 567 00:28:10,680 --> 00:28:12,200 Speaker 1: able to sue him to try and force him to 568 00:28:12,240 --> 00:28:15,959 Speaker 1: complete the deal. Wagner, we thank you so much for 569 00:28:16,000 --> 00:28:18,200 Speaker 1: all the breaking news analysis, and Christal c as well 570 00:28:18,280 --> 00:28:21,560 Speaker 1: really jumping in the share and giving us such analysis 571 00:28:21,640 --> 00:28:24,439 Speaker 1: and nuance to what we are learning. Of course, that 572 00:28:24,640 --> 00:28:26,960 Speaker 1: is Elon Musk is looking to terminate the deal to 573 00:28:27,040 --> 00:28:33,800 Speaker 1: buy Twitter. Welcome back to Bloomberg Technology. Guess what breaking news. 574 00:28:33,840 --> 00:28:37,159 Speaker 1: Elon Musk, as many had predicted, has indeed started the 575 00:28:37,200 --> 00:28:39,320 Speaker 1: process of trying to terminate the deal to buy Twitter. 576 00:28:39,360 --> 00:28:41,480 Speaker 1: Here's a filed and amended thirt D and of course 577 00:28:41,560 --> 00:28:46,400 Speaker 1: is calling out phil failure to provide essential information, ignoring 578 00:28:46,720 --> 00:28:50,080 Speaker 1: of requests for information, in particular what he calls a 579 00:28:50,160 --> 00:28:52,080 Speaker 1: number of bots that he thinks of far in excess 580 00:28:52,080 --> 00:28:54,800 Speaker 1: of five percent. All of this has driven Twitter stopped 581 00:28:54,840 --> 00:28:57,640 Speaker 1: down after hours and moving some other shares as well. 582 00:28:57,960 --> 00:29:00,120 Speaker 1: kJ Greyfeld, I'm pleased to say still in the off 583 00:29:00,160 --> 00:29:02,719 Speaker 1: with us and a Coles Cosset report to You've been 584 00:29:02,760 --> 00:29:04,320 Speaker 1: looking at a lot of notes leading up to this 585 00:29:04,360 --> 00:29:07,680 Speaker 1: about probabilities whether this deal will get done. It's been 586 00:29:08,040 --> 00:29:11,560 Speaker 1: interesting to watch sort of the Wall Street community talk 587 00:29:11,640 --> 00:29:14,040 Speaker 1: about this deal, and Dan Ives from One Bush put 588 00:29:14,040 --> 00:29:16,880 Speaker 1: it on a note yesterday actually UH saying that there's 589 00:29:16,920 --> 00:29:19,760 Speaker 1: a sixty chance that this deal even gets sun. That 590 00:29:19,800 --> 00:29:22,960 Speaker 1: was yesterday, of course, fall following some Washington Post reporting. 591 00:29:23,240 --> 00:29:26,080 Speaker 1: They also suggested that there could be a thirty five 592 00:29:26,120 --> 00:29:29,000 Speaker 1: percent chance that must go loss away from the deal altogether, 593 00:29:29,160 --> 00:29:32,560 Speaker 1: which obviously has borne out now. And obviously the bots 594 00:29:32,680 --> 00:29:35,480 Speaker 1: question has been a big question regarding this deal. But 595 00:29:35,520 --> 00:29:38,600 Speaker 1: there's also the share price to consider. Of course. One 596 00:29:38,680 --> 00:29:41,480 Speaker 1: Musk had made this offer. It was at fifty four 597 00:29:41,560 --> 00:29:46,440 Speaker 1: dollars and twenty cents a deal, UH, and that had 598 00:29:46,480 --> 00:29:49,920 Speaker 1: been sort of floated in the analyst community that maybe 599 00:29:49,920 --> 00:29:52,640 Speaker 1: that price is just too lofty, maybe they'll negotiate it 600 00:29:52,920 --> 00:29:54,840 Speaker 1: down more. And you can see Twitter shares right now 601 00:29:54,840 --> 00:29:58,760 Speaker 1: trading around thirty four dollars fifty four cents, so that 602 00:29:58,960 --> 00:30:03,040 Speaker 1: premium that dis that between the two had grown and 603 00:30:03,120 --> 00:30:06,480 Speaker 1: obviously growing now and now the deal is terminated. And 604 00:30:06,480 --> 00:30:07,840 Speaker 1: I also want to ask you a bit about the 605 00:30:07,840 --> 00:30:10,920 Speaker 1: Tesla market reaction, one that you've pointed out on Twitter itself. 606 00:30:11,040 --> 00:30:12,880 Speaker 1: I don't agree as what we're using that social media 607 00:30:13,120 --> 00:30:15,840 Speaker 1: platform to brighten the knees, but remind us as to 608 00:30:15,880 --> 00:30:18,560 Speaker 1: why to Tesla might bounce on it. So the deal 609 00:30:18,640 --> 00:30:22,240 Speaker 1: here is that obviously Musk is the CEO of Tesla, 610 00:30:22,360 --> 00:30:24,800 Speaker 1: and so the bold case behind my you're probably seeing 611 00:30:24,800 --> 00:30:27,000 Speaker 1: the shares move higher, and after hours I see Tesla 612 00:30:27,040 --> 00:30:29,239 Speaker 1: shares up over one percent at the moment, higher than 613 00:30:29,240 --> 00:30:31,800 Speaker 1: when I tweeted this. Is that perhaps Musk will now 614 00:30:31,840 --> 00:30:36,719 Speaker 1: refocus his attention on Tesla, supposedly, you know, his main company, 615 00:30:36,760 --> 00:30:38,600 Speaker 1: but as we know, I mean, Musk has always been 616 00:30:38,600 --> 00:30:41,400 Speaker 1: sort of a part time CEO of Tesla. He obviously 617 00:30:41,400 --> 00:30:44,000 Speaker 1: has a lot of projects going on, including SpaceX. So 618 00:30:44,080 --> 00:30:46,520 Speaker 1: we'll see if this move holds when we actually get 619 00:30:46,560 --> 00:30:49,160 Speaker 1: into real trading on Monday. But interesting to see the 620 00:30:49,200 --> 00:30:51,720 Speaker 1: after hours reaction. You see the knee jerk move lower 621 00:30:51,760 --> 00:30:54,360 Speaker 1: and Twitter shares down over six percent. You look at 622 00:30:54,400 --> 00:30:57,040 Speaker 1: Tesla shares up moving up to one and a half 623 00:30:57,120 --> 00:30:59,800 Speaker 1: percent or so. Now, so that is the knee jerk 624 00:31:00,880 --> 00:31:03,240 Speaker 1: Katy Greifeldt. As always, we thank you for the knee 625 00:31:03,320 --> 00:31:06,480 Speaker 1: joke reactions, the ultimate reactions. Mobidus to say also ahead 626 00:31:06,480 --> 00:31:08,760 Speaker 1: of Wall Street Week, because I've very own David Weston, 627 00:31:08,880 --> 00:31:12,400 Speaker 1: of course, anchor of that show, anchor of of course 628 00:31:12,480 --> 00:31:14,240 Speaker 1: of the politics show for us as well, and also 629 00:31:14,240 --> 00:31:16,800 Speaker 1: a man who knows an awful about the law, and 630 00:31:16,920 --> 00:31:19,400 Speaker 1: this is going this is going to the courts, right. 631 00:31:19,680 --> 00:31:22,800 Speaker 1: The one clear winner in this that the lawyers. They're 632 00:31:22,840 --> 00:31:24,480 Speaker 1: gonna be a lot of lawyers charging a lot of 633 00:31:24,520 --> 00:31:26,520 Speaker 1: money and you're gonna pay a lot of billbill hours 634 00:31:26,560 --> 00:31:28,840 Speaker 1: as a result. I mean, I think there's so much 635 00:31:28,920 --> 00:31:30,760 Speaker 1: we don't know at this point. And we know that 636 00:31:30,920 --> 00:31:32,920 Speaker 1: now Elon Musk says he's not going to go forward 637 00:31:32,960 --> 00:31:34,880 Speaker 1: with the deal, we have to take him at his word. 638 00:31:34,920 --> 00:31:37,080 Speaker 1: At the same time, he has some legal obligations he 639 00:31:37,080 --> 00:31:40,160 Speaker 1: has to address. The Twitter board has been very steadfast 640 00:31:40,160 --> 00:31:42,600 Speaker 1: and saying we're holding you your deal, and you have 641 00:31:42,680 --> 00:31:44,520 Speaker 1: to ask, is he really getting out of it or 642 00:31:44,560 --> 00:31:47,160 Speaker 1: is this a negotiation? Is this a negotiation over the 643 00:31:47,200 --> 00:31:50,200 Speaker 1: one billion dollar big breakup? Fee or a lower price 644 00:31:50,280 --> 00:31:53,520 Speaker 1: is Katie just suggested for the company. Let's be honest, 645 00:31:53,680 --> 00:31:56,360 Speaker 1: he would not have offered forty four billion dollars a 646 00:31:56,440 --> 00:31:58,600 Speaker 1: month after we offered it. It was no longer a 647 00:31:58,640 --> 00:32:01,400 Speaker 1: sensible price. And he's saying, I'm not sure I wanted 648 00:32:01,440 --> 00:32:03,760 Speaker 1: at that price. We'll see, but I'll guarantee it. There's 649 00:32:03,760 --> 00:32:06,400 Speaker 1: a lot of legal action coming up. And of course, David, 650 00:32:06,520 --> 00:32:09,000 Speaker 1: it is the fiducial duty of the board to fight 651 00:32:09,160 --> 00:32:11,240 Speaker 1: for the highest possible price. It is also going to 652 00:32:11,240 --> 00:32:13,880 Speaker 1: be incredibly costly for the board of Twitter and indeed 653 00:32:13,920 --> 00:32:16,480 Speaker 1: Twitter's executive team to be paying these sort of legal 654 00:32:16,520 --> 00:32:18,880 Speaker 1: fees when we know it's up against the wealthiest man 655 00:32:18,920 --> 00:32:20,400 Speaker 1: in the world. Absolutely, and two other things that I 656 00:32:20,520 --> 00:32:22,320 Speaker 1: add to that. A number one, there is a fairness 657 00:32:22,320 --> 00:32:26,040 Speaker 1: opinion that was rendered by Goldman, Sachs and others saying 658 00:32:26,040 --> 00:32:28,040 Speaker 1: this is a fair price. It's aftuly hard for the 659 00:32:28,080 --> 00:32:30,520 Speaker 1: board to say, Okay, we have a fairness opinion saying 660 00:32:30,600 --> 00:32:32,520 Speaker 1: that price is the fair price. Now we're just gonna 661 00:32:32,600 --> 00:32:34,280 Speaker 1: give up on it. We're not going to pursue that 662 00:32:34,320 --> 00:32:37,120 Speaker 1: anymore at all. That's a tough thing to do, and 663 00:32:37,160 --> 00:32:40,600 Speaker 1: the board has a pretty good legal argument, I would think, 664 00:32:40,880 --> 00:32:42,600 Speaker 1: and they've been pretty steadfast. At the same time, I 665 00:32:42,600 --> 00:32:45,280 Speaker 1: suspect part of what's driving Mr Musk is the board 666 00:32:45,280 --> 00:32:48,600 Speaker 1: has shown very little willingness to negotiate with him. Uh 667 00:32:48,600 --> 00:32:50,800 Speaker 1: and this, as I say, and maybe he's really trying 668 00:32:50,800 --> 00:32:53,360 Speaker 1: to get out of It's also possible that that in 669 00:32:53,400 --> 00:32:56,120 Speaker 1: fact he's he's really trying to get a real negotiation 670 00:32:56,160 --> 00:32:58,240 Speaker 1: going on. And also, David, going back to how the 671 00:32:58,360 --> 00:33:01,400 Speaker 1: steel erupted, He's have it did this in in a 672 00:33:01,440 --> 00:33:04,040 Speaker 1: completely bombastic way. For many a lawyer that it felt 673 00:33:04,080 --> 00:33:08,040 Speaker 1: as though documents were put in too late, documents weren't 674 00:33:08,080 --> 00:33:10,200 Speaker 1: filled out in the normal way, and indeed it seemed 675 00:33:10,240 --> 00:33:12,840 Speaker 1: as though he waved his rights to due diligence. Well 676 00:33:12,880 --> 00:33:15,960 Speaker 1: he did, I think explicitly waves the rights and due diligence, 677 00:33:15,960 --> 00:33:18,840 Speaker 1: which which says something but I say bombastic and Elon 678 00:33:18,920 --> 00:33:21,840 Speaker 1: Musk is not necessarily contradictory. Right, It's not a total 679 00:33:21,840 --> 00:33:23,880 Speaker 1: surprise that would work. But I think from telling you 680 00:33:23,880 --> 00:33:25,760 Speaker 1: to people who know Elon Musk can have dealt with 681 00:33:25,840 --> 00:33:28,040 Speaker 1: him even during this time, I think there's a good 682 00:33:28,040 --> 00:33:30,320 Speaker 1: part of the almost that really did want to buy Twitter. 683 00:33:30,400 --> 00:33:32,800 Speaker 1: Maybe he still does want to buy Twitter. He generally 684 00:33:32,880 --> 00:33:35,040 Speaker 1: wants to buy this company, thinks he can do something 685 00:33:35,080 --> 00:33:37,360 Speaker 1: good with this company. So I don't think he was 686 00:33:37,440 --> 00:33:40,120 Speaker 1: just toying with it at all. I just think he's 687 00:33:40,320 --> 00:33:43,720 Speaker 1: definitely of two minds. Apparently, David Western, what would do 688 00:33:43,760 --> 00:33:46,440 Speaker 1: without your legal expertise? And indeed po a man who 689 00:33:46,480 --> 00:33:47,640 Speaker 1: is going to go on and talk about this a 690 00:33:47,680 --> 00:33:49,640 Speaker 1: little bit, and of course your show, which we will 691 00:33:49,640 --> 00:33:52,040 Speaker 1: want to be watching Wall Street Week Balance of Power 692 00:33:52,080 --> 00:33:54,360 Speaker 1: as well. Of course he can tune into David Western there. 693 00:33:54,680 --> 00:33:56,960 Speaker 1: But we thank also our own Kat Grayfield for the 694 00:33:57,000 --> 00:34:00,320 Speaker 1: market moves and the reactions. More for you terms of 695 00:34:00,360 --> 00:34:03,000 Speaker 1: analysis to the breaking news this Friday. Of course, you 696 00:34:03,040 --> 00:34:05,200 Speaker 1: know Mask backing away from that forty four billion dollar 697 00:34:05,280 --> 00:34:15,480 Speaker 1: deal for Twitter. This is Blomberg. The disastrous scenario has 698 00:34:15,480 --> 00:34:19,120 Speaker 1: occurred as according to Dan Ives as well, this of course, 699 00:34:19,160 --> 00:34:22,640 Speaker 1: a key analyst on all things Twitter, putting out a 700 00:34:22,680 --> 00:34:24,760 Speaker 1: note as we speak from web Bush, Dan, I've saying 701 00:34:25,120 --> 00:34:27,160 Speaker 1: that the termination that we've just learned Harv, you know, 702 00:34:27,239 --> 00:34:29,640 Speaker 1: Mask trying to terminate the four billion dollar deal for 703 00:34:29,680 --> 00:34:32,640 Speaker 1: Twitter is a disaster scenario for Twitter and it's board. 704 00:34:32,760 --> 00:34:35,200 Speaker 1: As now the company will battle Musk in an elongated 705 00:34:35,239 --> 00:34:37,800 Speaker 1: court battle to recoup the deal and or the breakup 706 00:34:37,840 --> 00:34:41,200 Speaker 1: fee of one billion dollars at minimum. To discuss us 707 00:34:41,239 --> 00:34:44,200 Speaker 1: a little bit more amid all of this analysis, I 708 00:34:44,239 --> 00:34:46,839 Speaker 1: want to bring in one Ed Ludlow, who has been 709 00:34:46,880 --> 00:34:50,560 Speaker 1: on the plane back from one some valley event where 710 00:34:50,560 --> 00:34:53,720 Speaker 1: absolutely everyone has been talking about this deal. You managed 711 00:34:53,760 --> 00:34:56,000 Speaker 1: to read the letter that the T and D. What 712 00:34:56,080 --> 00:34:58,200 Speaker 1: were people saying about this deal to you? Ed Ludlow? 713 00:34:59,360 --> 00:35:01,400 Speaker 1: You know all of the investors I was spoken to 714 00:35:01,440 --> 00:35:03,560 Speaker 1: do over the last few days have been bracing for this, 715 00:35:03,760 --> 00:35:06,759 Speaker 1: the idea that a termination was possible. We know about 716 00:35:06,760 --> 00:35:10,640 Speaker 1: the one billion dollar reverse termination fee for both parties 717 00:35:10,680 --> 00:35:13,839 Speaker 1: that you know, investors are bracing for an outcome where 718 00:35:13,880 --> 00:35:17,000 Speaker 1: we have a long protracted legal battle between Elon Musk 719 00:35:17,000 --> 00:35:19,120 Speaker 1: and Twitter's board. You look through the letter that Elon 720 00:35:19,200 --> 00:35:23,600 Speaker 1: Musk sent to Twitter chief legals forgetting you know, he's 721 00:35:23,600 --> 00:35:28,000 Speaker 1: pretty clear he made multiple attempts to request information about 722 00:35:28,080 --> 00:35:32,360 Speaker 1: how the scientific approach the Twitter's board was taking to 723 00:35:32,600 --> 00:35:36,000 Speaker 1: quantifying level of box on the platform. Right, this idea 724 00:35:36,040 --> 00:35:38,240 Speaker 1: that there's less from five defensive blots on the platform 725 00:35:38,280 --> 00:35:41,120 Speaker 1: in terms of the user base, there's been a longstanding 726 00:35:41,760 --> 00:35:44,640 Speaker 1: boiler plate the Twitter of used in regulatory filing for 727 00:35:44,760 --> 00:35:47,200 Speaker 1: many years. And so it's it's kind of weird and 728 00:35:47,280 --> 00:35:49,279 Speaker 1: surprising that this was an issue from Musk in the 729 00:35:49,280 --> 00:35:53,080 Speaker 1: first place, because you remember that eight or twenty when 730 00:35:53,120 --> 00:35:56,279 Speaker 1: he signed a deal he waived due diligence anyway, you know, 731 00:35:56,360 --> 00:35:58,920 Speaker 1: with with the news as it is breaking that he's terminated. 732 00:35:59,280 --> 00:36:02,320 Speaker 1: You know, everyone I've spoken to in some valley it 733 00:36:02,480 --> 00:36:05,040 Speaker 1: thinks that this is bad for Twitter as a disasters 734 00:36:05,080 --> 00:36:08,480 Speaker 1: don for it, because you know, they're already cutting costs. 735 00:36:08,480 --> 00:36:11,400 Speaker 1: They've been bracing for a recession in which they're going 736 00:36:11,440 --> 00:36:14,440 Speaker 1: to have the lower r and defending lower head count. 737 00:36:15,000 --> 00:36:18,920 Speaker 1: And market is looking okay globally, but it's not perfect. 738 00:36:19,360 --> 00:36:20,920 Speaker 1: And now they're going to have to go to court 739 00:36:20,960 --> 00:36:22,399 Speaker 1: and and and get this done. And it was only 740 00:36:22,440 --> 00:36:25,319 Speaker 1: yet to day carried. You remember that they reiterated they 741 00:36:25,360 --> 00:36:28,200 Speaker 1: intended to follow through with the terms of the original deal. 742 00:36:28,239 --> 00:36:30,360 Speaker 1: And yet here we are, me on a jet playing 743 00:36:30,360 --> 00:36:32,680 Speaker 1: you in the studio and Pelon must walking away from 744 00:36:32,719 --> 00:36:36,600 Speaker 1: the deal just remind us because he talks of not 745 00:36:36,800 --> 00:36:41,760 Speaker 1: enough information. He talks of multiple requests. I thought Twitter 746 00:36:41,840 --> 00:36:47,080 Speaker 1: had been delivering information regarding bots. So in the letter, 747 00:36:47,400 --> 00:36:51,520 Speaker 1: Elon Much's attorneys say that by Twitter's own admission in 748 00:36:51,560 --> 00:36:55,080 Speaker 1: the communications they've made in the end of the beginning 749 00:36:55,080 --> 00:36:57,480 Speaker 1: of May and through the June period, that the data 750 00:36:57,480 --> 00:37:01,040 Speaker 1: would incomplete. Twitter's argument they took be is that a 751 00:37:01,200 --> 00:37:03,640 Speaker 1: third party be a third party and stored by the 752 00:37:03,719 --> 00:37:07,879 Speaker 1: mask been a third party chosen cannot verify the level 753 00:37:07,920 --> 00:37:11,640 Speaker 1: of boxing the platform, the reason being the twitters methodology 754 00:37:11,719 --> 00:37:14,560 Speaker 1: for verification uses a mix of private data that they 755 00:37:14,640 --> 00:37:18,640 Speaker 1: hold as the platform operator m And you know, private 756 00:37:18,680 --> 00:37:21,840 Speaker 1: data is such that they're protecting the contemer and public 757 00:37:21,920 --> 00:37:24,600 Speaker 1: data and only Twitter has access to that. And that's 758 00:37:24,600 --> 00:37:27,719 Speaker 1: what the discussion is around how complete that data work. Yeah, 759 00:37:28,080 --> 00:37:30,759 Speaker 1: and remind us because Elon Musk is due to be fly. 760 00:37:31,040 --> 00:37:32,719 Speaker 1: I think he's already arrived, has he not, or is 761 00:37:32,719 --> 00:37:34,799 Speaker 1: at least due to arrive at some values, want to 762 00:37:34,800 --> 00:37:38,200 Speaker 1: be giving a speech tomorrow. And the key issue is 763 00:37:38,280 --> 00:37:40,400 Speaker 1: al and Co were then advisor on the deal. In 764 00:37:40,440 --> 00:37:43,040 Speaker 1: some way, this is this could be an amazing meeting 765 00:37:43,040 --> 00:37:46,040 Speaker 1: of all the top executives because I understand the CEO 766 00:37:46,120 --> 00:37:49,839 Speaker 1: and the CFO Twitter also at some value. Yeah, I'm 767 00:37:49,920 --> 00:37:52,000 Speaker 1: just going to say out loud, I wish I was 768 00:37:52,040 --> 00:37:54,680 Speaker 1: still in either or I wish I was with you 769 00:37:54,680 --> 00:37:57,800 Speaker 1: in the studio, because this is the most crazy story 770 00:37:58,040 --> 00:38:01,160 Speaker 1: of my career in lifetime. That al and Co. He's 771 00:38:01,200 --> 00:38:04,160 Speaker 1: an advisor on the Twitter side, okay, Hanlen and Co 772 00:38:04,360 --> 00:38:07,560 Speaker 1: is a long standing investment bank advisor for Twitter. And 773 00:38:07,560 --> 00:38:10,000 Speaker 1: then on the other side, they've invited Elon Musk in 774 00:38:10,080 --> 00:38:15,000 Speaker 1: the conference. No one saw Paragage Segal and Elon Musk 775 00:38:15,000 --> 00:38:17,480 Speaker 1: in the same space as you know. I asked med 776 00:38:17,520 --> 00:38:19,879 Speaker 1: Peogle and Paragagon Roll last night if they were worried 777 00:38:19,920 --> 00:38:23,080 Speaker 1: about Elon Musk walking your way. Twice they declined to 778 00:38:23,120 --> 00:38:26,359 Speaker 1: answer the question, and t four hours later he walked away. 779 00:38:26,400 --> 00:38:29,239 Speaker 1: So there we go. There we go, at Dudlow, We'll 780 00:38:29,320 --> 00:38:31,120 Speaker 1: let you go for a moment to thank you so 781 00:38:31,200 --> 00:38:33,000 Speaker 1: much for jumping on the phone with us, Ed Ludlow. 782 00:38:33,200 --> 00:38:35,680 Speaker 1: With the analysis, We've also got some expan analysis from 783 00:38:35,680 --> 00:38:39,200 Speaker 1: a senior analyst on Twitter of web Bush Securities, one 784 00:38:39,280 --> 00:38:41,680 Speaker 1: Dan Ice, who has a rating neutral on Twitter, who 785 00:38:41,719 --> 00:38:44,000 Speaker 1: has a price of thirty eight dollars seventy nine, and 786 00:38:44,000 --> 00:38:46,240 Speaker 1: it was a twelve month price target of forty three dollars. 787 00:38:46,239 --> 00:38:48,080 Speaker 1: But Dan ives, you've already put out a note. You're 788 00:38:48,080 --> 00:38:50,200 Speaker 1: a busy man. What do you make of this walk away? 789 00:38:51,000 --> 00:38:53,880 Speaker 1: I mean, for Twitter, it's a it's a namedayor scenario 790 00:38:54,160 --> 00:38:57,640 Speaker 1: because now it's a standalone company. Start could be twenty 791 00:38:57,640 --> 00:39:00,719 Speaker 1: five thirty hours on Monday and they feed just a 792 00:39:00,800 --> 00:39:04,200 Speaker 1: brutal core battle with Musk, and this has been it's 793 00:39:04,320 --> 00:39:06,799 Speaker 1: been a you know, a circus show in terms of 794 00:39:06,800 --> 00:39:09,279 Speaker 1: from the beginning it never made sense as to why 795 00:39:09,400 --> 00:39:11,919 Speaker 1: Musk going to buy it, But now the way it ends, 796 00:39:12,480 --> 00:39:15,160 Speaker 1: it's just it really ends. It puts them between a 797 00:39:15,280 --> 00:39:18,279 Speaker 1: rock and a hard place, and the street's gonna, you know, 798 00:39:18,560 --> 00:39:20,759 Speaker 1: really have a hard time with this. In terms of 799 00:39:20,760 --> 00:39:24,239 Speaker 1: Twitter basically being viewed as damaged goods, I'm really interested in. 800 00:39:24,400 --> 00:39:26,400 Speaker 1: And originally, as we were hearing when we talked to 801 00:39:26,480 --> 00:39:28,800 Speaker 1: David Western that you know, forty four billion dollars was 802 00:39:28,880 --> 00:39:33,520 Speaker 1: deemed fair value for overall Twitter. And as said, I 803 00:39:33,520 --> 00:39:35,839 Speaker 1: think my Goldman sacks, why do you have a fair 804 00:39:35,920 --> 00:39:38,359 Speaker 1: value price of thirty eight dollar seventy nine? What is it? 805 00:39:38,360 --> 00:39:40,160 Speaker 1: It was the underlying business model. How much has that 806 00:39:40,200 --> 00:39:43,640 Speaker 1: eroded since Elon Musk first put in his offer, well, 807 00:39:43,680 --> 00:39:47,719 Speaker 1: first off billion from the beginning never made chance and 808 00:39:47,760 --> 00:39:50,480 Speaker 1: that's why there was no other bidder within miles of it. 809 00:39:50,920 --> 00:39:53,799 Speaker 1: You know, we always to fair value for Twitter was 810 00:39:53,920 --> 00:39:59,520 Speaker 1: somewhere in an acquisition forty and now the fake account 811 00:39:59,560 --> 00:40:03,560 Speaker 1: bod issue, you will as that's really come to the forefront. 812 00:40:04,160 --> 00:40:07,160 Speaker 1: I think now this condition is the stock that's gonna 813 00:40:07,200 --> 00:40:10,200 Speaker 1: have a chew in front of it because of those metrics, 814 00:40:10,320 --> 00:40:13,359 Speaker 1: and also the markets changed so much sense to deal 815 00:40:13,440 --> 00:40:16,040 Speaker 1: whether it's Must get in cold feet and now it 816 00:40:16,120 --> 00:40:19,040 Speaker 1: really sends us onto a tail spin in terms of Twitter. 817 00:40:19,320 --> 00:40:21,600 Speaker 1: And I also think Must comes out with a black 818 00:40:21,640 --> 00:40:24,160 Speaker 1: eye in terms of how this was all handled. I 819 00:40:24,239 --> 00:40:27,120 Speaker 1: agree and many would agree, I think in terms of 820 00:40:27,160 --> 00:40:32,040 Speaker 1: like how something of news organizations view M and A offers. 821 00:40:32,040 --> 00:40:35,759 Speaker 1: But I'm interested in your take from a four billion 822 00:40:35,800 --> 00:40:37,680 Speaker 1: dollar price tag. What is it about the box? I 823 00:40:37,719 --> 00:40:39,759 Speaker 1: thought we sort of knew about the box and the 824 00:40:39,800 --> 00:40:43,000 Speaker 1: fact that what is it that from a Twitter perspective 825 00:40:43,000 --> 00:40:45,759 Speaker 1: could have been done better on that. Well, it's all 826 00:40:45,800 --> 00:40:49,640 Speaker 1: about what is it five? Or is it? And I 827 00:40:49,640 --> 00:40:53,040 Speaker 1: think even though the body issue has always been a 828 00:40:53,120 --> 00:40:56,319 Speaker 1: black cloud over Twitter's name, you know, even if you 829 00:40:56,360 --> 00:40:59,279 Speaker 1: go back over the years, now it comes down, that's 830 00:40:59,320 --> 00:41:02,160 Speaker 1: just how how big is that number? Because that's demodogation, 831 00:41:02,320 --> 00:41:05,439 Speaker 1: that's the metrics. Then on the other side, others will 832 00:41:05,520 --> 00:41:08,720 Speaker 1: argue Must just this is a scapegoat, it's cold feed. 833 00:41:09,280 --> 00:41:11,600 Speaker 1: He basically woke up one day decided not to do 834 00:41:11,640 --> 00:41:15,399 Speaker 1: it in typical must fashion. And now the knives will 835 00:41:15,440 --> 00:41:18,040 Speaker 1: be sharpened going into what's just going to be a 836 00:41:18,080 --> 00:41:22,239 Speaker 1: Game of Thrones core battle. We currently understand, of course, 837 00:41:22,239 --> 00:41:25,000 Speaker 1: and them and breaking news continues, but we do understand 838 00:41:25,040 --> 00:41:27,960 Speaker 1: that the Twitter board is committed to closing this transaction. 839 00:41:28,000 --> 00:41:31,200 Speaker 1: According to Brett Taylor, now the Twitter board is planning 840 00:41:31,280 --> 00:41:33,759 Speaker 1: legal action to enforce this agreement. Dan, how much the 841 00:41:33,800 --> 00:41:37,640 Speaker 1: money suck? Is that? Look? I think right now, I 842 00:41:37,640 --> 00:41:42,360 Speaker 1: mean Twitter is gonna officially come out with that stands 843 00:41:42,400 --> 00:41:45,520 Speaker 1: just deal. When the stocker's trainer at thirty eight bocks, 844 00:41:45,560 --> 00:41:48,439 Speaker 1: he was telling you twenty was never gonna happen. Now 845 00:41:48,480 --> 00:41:51,279 Speaker 1: the question is is there still some chance that there's 846 00:41:51,320 --> 00:41:54,359 Speaker 1: some renegotiation that happens. I think the will is too 847 00:41:54,480 --> 00:41:57,799 Speaker 1: much at this point. And now Monday, Twitter is gonna 848 00:41:57,800 --> 00:42:00,359 Speaker 1: be looking at the stock with the two in front 849 00:42:00,400 --> 00:42:03,920 Speaker 1: of the probably high twenties. And now this starts to 850 00:42:03,920 --> 00:42:07,160 Speaker 1: go into free fall. Tanys, we want to thank you 851 00:42:07,239 --> 00:42:09,920 Speaker 1: so much, Senior Alice. Over their web, Bush Security is 852 00:42:09,920 --> 00:42:12,399 Speaker 1: already putting out an on this deal. As we say, 853 00:42:12,480 --> 00:42:15,280 Speaker 1: the Twitter board is planning legal action to enforce this agreement. 854 00:42:15,280 --> 00:42:17,520 Speaker 1: This is coming from Brett Taylor, Here's the chairman of 855 00:42:17,600 --> 00:42:20,160 Speaker 1: Twitter's a busy man because it's also the co se here. 856 00:42:20,239 --> 00:42:22,800 Speaker 1: We know, of course the salesforce. But he is on 857 00:42:22,880 --> 00:42:25,719 Speaker 1: the board of Twitter, and he is saying, look, we're 858 00:42:25,719 --> 00:42:28,399 Speaker 1: gonna be fighting this. Tend to close the transaction at 859 00:42:28,400 --> 00:42:30,920 Speaker 1: fifty four dollars twenty a share price. They received a 860 00:42:31,000 --> 00:42:33,799 Speaker 1: notice of the purported termination from Musk, and they tend 861 00:42:33,880 --> 00:42:36,880 Speaker 1: to close this transaction. They're confident in the merger pact 862 00:42:37,880 --> 00:42:39,880 Speaker 1: for all of this, says Bloomberg in New York. Have 863 00:42:39,960 --> 00:42:40,600 Speaker 1: a good weekend.