WEBVTT - Musk Cancels Twitter Deal 0:00:00.160 --> 0:00:03.360 We start with the disclaimer. This episode of Bloomberg Technology 0:00:03.480 --> 0:00:06.120 was taped just as the news broke that Elon Musk 0:00:06.400 --> 0:00:11.240 is terminating his deal to buy Twitter. From the heart 0:00:11.280 --> 0:00:15.840 of where Innovation, money and power CALLI in Silicon Valley 0:00:15.880 --> 0:00:33.440 and beyond. This is Bloomberg Technology with Emily Jay. I'm 0:00:33.479 --> 0:00:36.200 Caroline Hyde in New York. I'm in for a many 0:00:36.280 --> 0:00:38.600 chang and this has Beenenberg Technology. Coming up over the 0:00:38.640 --> 0:00:41.680 next hour, Elon Musk's escalating battle with Twitter, the fully 0:00:41.680 --> 0:00:45.560 four million on a takeover offer, possibly in Jeopanese plus TSMC, 0:00:45.720 --> 0:00:49.839 the world's watches contract chipmaker, reported better than expected Courtney revenue, 0:00:50.080 --> 0:00:53.680 signaling that electronics demand is holding up better than investors feared. 0:00:54.120 --> 0:00:56.760 And we look at today's jobs report, the US number, 0:00:56.880 --> 0:00:59.920 and how the tech sector is faring out in the numbers. 0:00:59.760 --> 0:01:04.000 It's especially with many companies laying off employee. We had 0:01:04.000 --> 0:01:05.880 to that in but a moment, befess, let's got to 0:01:05.959 --> 0:01:08.199 check on these markets. And guys, Katie greyfa with quite 0:01:08.200 --> 0:01:10.679 a run for the mastack, quite a run, kind of 0:01:10.720 --> 0:01:13.039 a muted end to what had been you know, a 0:01:13.080 --> 0:01:15.080 week of games. You look at the SP five hundred 0:01:15.440 --> 0:01:17.800 ending down just a hair about a tenth of percent. 0:01:18.080 --> 0:01:20.559 Tech of course fared better than AZZAC one hundred, gaining 0:01:20.600 --> 0:01:23.480 about a tenth of percent. Your big outperformer was the 0:01:23.520 --> 0:01:27.039 chip stocks. You have the Philadelphia Semiconductor's Index posting a 0:01:27.040 --> 0:01:30.680 half a percent gain even with two year yields rising 0:01:30.760 --> 0:01:33.680 almost nine basis points, just on the nose after that 0:01:33.760 --> 0:01:36.520 blockbuster jobs report. We got this moment, but let's stay 0:01:36.520 --> 0:01:39.840 on the chip because they were the outperformer today, outperformer 0:01:39.959 --> 0:01:42.520 on the week. If you look at the past four 0:01:42.640 --> 0:01:46.280 days for the socks index, up six and a half percent. 0:01:46.360 --> 0:01:48.960 Most of those games came yesterday. You had Samsung come 0:01:48.960 --> 0:01:52.000 out report a bigger than expected jump in revenue. That's 0:01:52.040 --> 0:01:54.640 sort of changed the mute mood music for the space 0:01:54.640 --> 0:01:56.720 in a really good way. And as you can see, 0:01:56.920 --> 0:01:59.960 closing out with some really solid gains for an inte 0:02:00.200 --> 0:02:03.160 that has been struggling. And speaking of solid games, let's 0:02:03.280 --> 0:02:05.360 end on Bitcoin just for you, Caroline, and had a 0:02:05.440 --> 0:02:09.400 pretty good week, best week actually since October. But if 0:02:09.440 --> 0:02:12.200 you look year to date, as you can see, barely 0:02:12.400 --> 0:02:16.200 made a dent. Bitcoin still down over fifty two percent, 0:02:16.280 --> 0:02:19.200 close to fifty year to date, and as you look 0:02:19.200 --> 0:02:21.200 at this, you can see that the line went up 0:02:21.240 --> 0:02:23.919 a little bit, but again barely a scratch for what's 0:02:23.919 --> 0:02:26.960 been a really bad year for bitcoin. That has been Katie, 0:02:27.000 --> 0:02:29.680 we thank you, and we've kind of been bracing ourselves 0:02:29.680 --> 0:02:31.919 for pretty bad job support as well. If you look 0:02:31.919 --> 0:02:33.880 at the anecdotal evidence coming from some of the tech 0:02:33.919 --> 0:02:36.560 firms at least, but actually US employee has added way 0:02:36.560 --> 0:02:39.320 more jobs in June than forecast, and the unemployment rate 0:02:39.400 --> 0:02:42.160 held near a five decade low, signs of both strong 0:02:42.200 --> 0:02:45.520 demand tight labor market that will keep the federal officials 0:02:45.680 --> 0:02:48.720 pretty much tilted towards another interest rate height to the 0:02:48.760 --> 0:02:51.480 tune of fifty or seventy five basis points. Jane's our 0:02:51.880 --> 0:02:54.200 class door drives us now to discuss the current labor 0:02:54.240 --> 0:02:57.120 market and Dania. Before we dig deep into the nuances 0:02:57.440 --> 0:03:00.320 particularly affecting the tech sector, let's talk about broad rush 0:03:00.360 --> 0:03:04.360 three two thousand jobs at it. It was good. Yeah, 0:03:04.560 --> 0:03:08.240 this is a job market that fundamentally remains healthy. We're 0:03:08.240 --> 0:03:12.000 seeing strong job gains and even though there is rain 0:03:12.120 --> 0:03:15.000 on the forecast, we still see that skies are clear 0:03:15.000 --> 0:03:20.000 for the labor market. Where did we see any weakness 0:03:20.040 --> 0:03:22.720 of a tool? My eyes trained for example, into the 0:03:22.720 --> 0:03:26.760 participation levels that was a blemish in the report. We 0:03:26.800 --> 0:03:29.680 did see labor force participation rate comeback a little bit, 0:03:29.760 --> 0:03:32.160 and that was in large part driven by a decrease 0:03:32.200 --> 0:03:35.440 for black workers. However, I think that we shouldn't put 0:03:35.440 --> 0:03:37.800 too much stock into one month changes, and I do 0:03:37.920 --> 0:03:39.920 think that as long as the job market continues to 0:03:39.960 --> 0:03:43.120 remain tight, then we should see that labor force participation 0:03:43.200 --> 0:03:45.480 rate continue to trend upwards like it's been doing over 0:03:45.480 --> 0:03:47.600 the last year. And what keeps it tight there for 0:03:47.760 --> 0:03:51.120 Daniel for the meantime, well, we still see that employer 0:03:51.200 --> 0:03:54.680 demand is extremely high. There over eleven million job openings, 0:03:54.720 --> 0:03:58.080 almost still two job openings for unemployed worker, and so 0:03:58.120 --> 0:04:01.080 as long as that relations ship holds, than we should 0:04:01.360 --> 0:04:04.160 continue to see more workers being drawn in from off 0:04:04.160 --> 0:04:06.560 the sidelines. And yeah, I have to say to that end, 0:04:06.640 --> 0:04:08.800 I was confused when you look at the amount of 0:04:08.800 --> 0:04:11.240 women in the workforce is still well below where it 0:04:11.360 --> 0:04:14.960 was pre pandemic. As you say, black workers, Asian workers 0:04:14.960 --> 0:04:18.480 in particular, men not participating in the levels that they 0:04:18.480 --> 0:04:22.120 were previously. Is it childcare that's the issue. Is it 0:04:22.800 --> 0:04:26.200 lack of good pay benefits? What is it that's holding 0:04:26.200 --> 0:04:29.120 people back. Do you think there definitely are some pandemic 0:04:29.160 --> 0:04:32.280 related factors, So when we look at childcare and elder care, 0:04:32.320 --> 0:04:34.440 which I think is especially important to keep in mind 0:04:34.560 --> 0:04:38.039 given the context of one COVID, UH, those care factors 0:04:38.040 --> 0:04:40.120 are definitely something that are still holding people out of 0:04:40.200 --> 0:04:43.320 the economy. COVID itself is still of course going on, 0:04:43.400 --> 0:04:47.120 and that that does prevent some workers from fully engaging. 0:04:47.360 --> 0:04:49.680 But I think it's also important to remember just structurally 0:04:50.000 --> 0:04:52.760 that because of retirement, because of the aging population, we 0:04:52.760 --> 0:04:56.000 should naturally expect the way before participation rate to come 0:04:56.040 --> 0:04:59.200 down a little bit um And on top of that, 0:04:59.240 --> 0:05:01.680 we also have other factors like immigration, which has been 0:05:01.880 --> 0:05:05.440 particularly low over the last few years, holding down some 0:05:05.839 --> 0:05:09.360 potential lay before it stains. Daniel. I'm interested in therefore 0:05:09.400 --> 0:05:12.080 going sector by sector because what we do continue to 0:05:12.120 --> 0:05:14.640 see is kind of a shifting of where we've been spending. 0:05:14.680 --> 0:05:16.320 We all want to go and have experiences, we want 0:05:16.320 --> 0:05:17.680 to go out, we want to eat. We don't want 0:05:17.680 --> 0:05:19.440 to be buying things in quite the degree that we 0:05:19.440 --> 0:05:21.840 were before. Now you're seeing that born out in terms 0:05:21.880 --> 0:05:23.920 of labor still well. I actually, I think what's really 0:05:23.960 --> 0:05:26.800 interesting about today's report was that we saw a very 0:05:26.839 --> 0:05:29.279 broad based job gains. So even though there are concerns 0:05:29.320 --> 0:05:32.640 that consumer spending is rotating away from goods back to services, 0:05:32.680 --> 0:05:35.960 we actually saw healthy job gains in retail around about 0:05:35.960 --> 0:05:40.000 fifteen thousand jobs added after a job bosses last month, 0:05:40.080 --> 0:05:42.440 and so that's still an area of strength where we 0:05:42.480 --> 0:05:45.279 are still seeing job gains despite some of these anecdotes 0:05:45.279 --> 0:05:48.159 that we've been hearing from companies from earning calls of 0:05:48.360 --> 0:05:51.400 weakness and retail center. Well, I mean, let's talk about 0:05:51.440 --> 0:05:53.320 some of the anecdotal evidence, because it's not just been 0:05:53.360 --> 0:05:56.800 in retail, it's been in real estate, particularly technology driven 0:05:56.839 --> 0:05:59.760 real estate. We've seen the likes of Game Stop saying 0:05:59.760 --> 0:06:02.560 that the letting go of workers. I mean, I know 0:06:02.640 --> 0:06:05.159 these are very tiny pools of labor. But then you 0:06:05.200 --> 0:06:07.280 have a headline that comes from the information that says 0:06:07.279 --> 0:06:10.000 Oracle is discussing laying off thousands of workers as they 0:06:10.000 --> 0:06:12.279 look to cut you know, about a billion dollars in 0:06:12.360 --> 0:06:15.240 terms of costs. Are we going to brace ourselves for that? 0:06:15.400 --> 0:06:18.040 Daniel Well, I think today's jobs report is actually a 0:06:18.080 --> 0:06:20.599 little bit of a surprise because we actually saw information 0:06:20.640 --> 0:06:23.840 at twenty five thousand jobs, which was well above what 0:06:23.920 --> 0:06:26.440 you might expect given we've heard all these anecdotes, these 0:06:26.440 --> 0:06:28.920 prominent anecdotes of the layoffs, and I think what we 0:06:29.000 --> 0:06:31.960 might be seeing is that yes, there are prominent laoffs, 0:06:32.000 --> 0:06:34.560 but they might not be widespread quite yet, or at 0:06:34.560 --> 0:06:36.560 the very least many workers who are being laid off 0:06:36.600 --> 0:06:38.640 are able to get up back on their feet pretty 0:06:38.680 --> 0:06:41.360 quickly and find other roles. Certainly, what we've been hearing 0:06:41.360 --> 0:06:45.880 anecdotally is that maybe candidates have two job offers as 0:06:45.920 --> 0:06:48.240 opposed to five job offers on the table. But the 0:06:48.240 --> 0:06:50.240 fact is is that they are still finding jobs, they 0:06:50.240 --> 0:06:53.240 are still being hired, and what about the wages that 0:06:53.279 --> 0:06:56.360 they're seeking, Daniel, I mean, what was interesting is probably 0:06:56.440 --> 0:06:59.920 music to the federal reserves here is the wage inflation 0:07:00.480 --> 0:07:03.360 is actually being pretty suppressed. At the moment. Wage inflation 0:07:03.520 --> 0:07:06.120 is slowing, and I think that that is a result 0:07:06.160 --> 0:07:09.400 of the slowing labor market overall, because in that example 0:07:09.440 --> 0:07:11.920 I gave, if somebody has five job offers on the table, 0:07:11.960 --> 0:07:14.000 then certainly they have a lot more leverage than somebody 0:07:14.000 --> 0:07:16.280 who only has two or somebody who only has one. 0:07:16.560 --> 0:07:19.400 In all of those cases, that person is probably getting 0:07:19.440 --> 0:07:22.960 a new job, but their wage growth potential is very 0:07:22.960 --> 0:07:27.120 different in eutra of those scenarios. Daniel Chow, thank you 0:07:27.200 --> 0:07:30.360 so much. From Glastore. Of course, senior economists, they're talking 0:07:30.360 --> 0:07:34.200 all about some of them numbers and nuances in the numbers, 0:07:34.240 --> 0:07:37.360 particularly around the tech sector. We thank him. We start 0:07:37.400 --> 0:07:40.720 with the disclaimer. This episode of Bloomberg Technology was taped 0:07:40.760 --> 0:07:43.920 just as the news broke that Elon Musk is terminating 0:07:43.960 --> 0:07:54.280 his deal to buy Twitter. Well, let's check in on 0:07:54.320 --> 0:07:56.960 where the big deal is or isn't going. Of course, 0:07:56.960 --> 0:07:59.480 we're talking about elo Musk's escalating battle of the boats 0:07:59.520 --> 0:08:01.960 with Twitter. It's possibly threatened to walk away from that 0:08:02.000 --> 0:08:05.800 forty four billion dollar takeover. Offers Kurt Wagner, as always, 0:08:05.880 --> 0:08:07.960 is all over the story and he joins us, now, 0:08:08.480 --> 0:08:11.240 so I mean, is it about bots? I don't think 0:08:11.240 --> 0:08:14.200 it's actually about bots. I think, as we've been talking 0:08:14.240 --> 0:08:16.080 for a couple of weeks now, Caroline, I think this 0:08:16.200 --> 0:08:20.120 is probably about Ellen's hope of renegotiating this deal. Right, 0:08:20.160 --> 0:08:23.040 the market has changed dramatically since he agreed to buy 0:08:23.120 --> 0:08:26.520 Twitter for fifty four dollars and twenty cents per chair 0:08:26.600 --> 0:08:29.720 in late April. I imagine if he had waited even 0:08:29.760 --> 0:08:31.440 just a month, he probably could have gotten a company 0:08:31.480 --> 0:08:33.960 for a much lower price. And I get the sense 0:08:33.960 --> 0:08:36.160 that he's using this bod issue to try and you know, 0:08:36.240 --> 0:08:39.920 force a change there. Thus far, Twitter has said again 0:08:39.960 --> 0:08:42.880 and again we are holding him accountable for the price 0:08:42.920 --> 0:08:47.320 originally talked of. But realistically this is heading for the courts, 0:08:47.440 --> 0:08:49.760 right if if indeed he does walk away. It feels 0:08:49.800 --> 0:08:54.040 that way because as you point out, Twitter really, I 0:08:54.080 --> 0:08:56.240 guess has control here in the sense that he has 0:08:56.280 --> 0:08:58.679 agreed to buy the company for this price, right he 0:08:58.720 --> 0:09:01.560 cannot simply walk a way without some type of illegal 0:09:01.600 --> 0:09:04.079 battle on Twitter seems to be saying that they're willing 0:09:04.120 --> 0:09:07.040 to do that. Now. I don't know how beneficial that 0:09:07.120 --> 0:09:09.640 is to Twitter to go spend a lot of time 0:09:09.640 --> 0:09:12.200 and money fighting him in port. Maybe they would, you know, 0:09:12.280 --> 0:09:15.320 come to some type of settlement or agreement to lower 0:09:15.360 --> 0:09:17.400 the price without having to get there. But you know, 0:09:17.840 --> 0:09:20.240 it's in Twitter's best interest here to get the best 0:09:20.320 --> 0:09:22.720 deal for the company. And right now, that's fifty four 0:09:22.760 --> 0:09:24.640 dollars and twenty cents to share that he offered back 0:09:24.679 --> 0:09:29.120 in April. Suddenly and overall, do you think at some 0:09:29.240 --> 0:09:32.280 valley we're inspecting in a mosque to arrive. Of course 0:09:32.320 --> 0:09:34.679 Alan and Co is advising we understand on the deal. 0:09:34.760 --> 0:09:36.800 So I mean this sort of the debate is going 0:09:36.840 --> 0:09:39.360 to come up. It's going to be lifted at some point, right. Yeah. 0:09:39.440 --> 0:09:42.680 The question is he going to be um sharing any 0:09:42.720 --> 0:09:45.079 new information? And I think he last kind of spoke 0:09:45.120 --> 0:09:49.680 publicly at the towards the end of June maybe June, 0:09:49.760 --> 0:09:51.400 and he really just kind of said stuff that he'd 0:09:51.400 --> 0:09:53.320 already been saying before. And then there was a report 0:09:53.400 --> 0:09:55.960 yesterday he probably saw from the Washington Post that that 0:09:56.040 --> 0:09:58.760 he's unhappy still with these bought figures and what Twitter 0:09:58.800 --> 0:10:00.800 is putting out on the boat front. So it may 0:10:00.880 --> 0:10:03.400 just be re reiterating the kinds of things he's already 0:10:03.400 --> 0:10:06.040 been saying. Of course, anything he says new would be 0:10:06.080 --> 0:10:08.440 super significant, because I feel like it's been a lot 0:10:08.440 --> 0:10:10.600 of the same stuff from both sides now for a 0:10:10.600 --> 0:10:13.040 couple of weeks. What's the one thing you're looking for 0:10:13.120 --> 0:10:15.560 on this stale there fall. I guess I want to 0:10:15.600 --> 0:10:20.439 see if he's actually willing to walk away, right, I mean, 0:10:20.480 --> 0:10:23.360 he's sort of threatened it. Um. I'd say two or 0:10:23.400 --> 0:10:26.640 even three times. Now, is he really willing to say 0:10:26.960 --> 0:10:29.160 I wish I hadn't done this deal and I'm going 0:10:29.200 --> 0:10:31.440 to force Twitter's hand to sue me. Now, of course 0:10:31.520 --> 0:10:33.960 that's that's kind of like saying I'm most looking forward 0:10:34.000 --> 0:10:35.719 to the you know, the big fight scene at the 0:10:35.800 --> 0:10:38.000 end of the movie. Of course everyone is. But I 0:10:38.040 --> 0:10:40.400 do really think that that's the main hang up here, 0:10:40.480 --> 0:10:43.160 you know, is is he really going to do what 0:10:43.200 --> 0:10:45.720 he seems to be threatening to do. Tell us a 0:10:45.760 --> 0:10:48.040 little bit about how Twitter is sparing in all of this. 0:10:48.320 --> 0:10:50.200 It's been a tough It's been a tough go if 0:10:50.240 --> 0:10:52.560 you're an employee of Twitter for the last few months. 0:10:52.600 --> 0:10:54.960 Not only is this deal kind of hovering over everything, 0:10:55.080 --> 0:10:57.160 kind of creates a little bit of awkwardness around you know, 0:10:57.200 --> 0:11:00.000 what should we focus on? What should we build? Um 0:11:00.040 --> 0:11:01.880 But they have said they're going to do cost cuts, 0:11:01.920 --> 0:11:05.640 They did hiring freeze, they even rescinded some job operas, 0:11:05.679 --> 0:11:07.760 and then there was news yesterday that that they actually 0:11:07.840 --> 0:11:10.280 laid off a hundred people. It's a very small percentage 0:11:10.280 --> 0:11:12.800 of the overall workforce, but you get the idea that 0:11:12.880 --> 0:11:15.760 things just aren't really moving in the growth direction for 0:11:15.800 --> 0:11:18.000 them right now, and when you add that on top 0:11:18.080 --> 0:11:20.000 of the fact that they're waiting for this deal to 0:11:20.400 --> 0:11:23.400 possibly close but possibly not. I just think it creates 0:11:23.400 --> 0:11:25.400 a really awkward situation if you're an employee at the 0:11:25.400 --> 0:11:29.280 company today and how's it thus far in any way? 0:11:29.400 --> 0:11:32.160 You know, sometimes bad news is well, all PR is good. 0:11:32.200 --> 0:11:35.480 PR hasn't made people turned to the social media platform? 0:11:35.559 --> 0:11:39.160 Have people re engaged with it been previously before? Because 0:11:39.200 --> 0:11:40.720 it's been in the news cycle so much, you know, 0:11:40.760 --> 0:11:43.280 it's it's a good question. We'll actually probably find out 0:11:43.960 --> 0:11:46.840 because the second quarter just ended. Of course, Now last 0:11:46.880 --> 0:11:49.200 time they didn't do a full earnings, they didn't do 0:11:49.200 --> 0:11:51.600 a call. They just kind of released kind of a 0:11:51.640 --> 0:11:54.400 bare bones press release with some numbers. But it'll be 0:11:54.440 --> 0:11:56.520 interesting to see if the user growth is still there. 0:11:56.559 --> 0:11:58.560 But you know, is this driving people to service? Like 0:11:59.000 --> 0:12:01.160 a little skeptical only because a lot of things that 0:12:01.240 --> 0:12:04.600 drive people to Twitter are major news events, um, you know, 0:12:04.679 --> 0:12:07.360 like an election for example. I'm not sure if the 0:12:07.400 --> 0:12:09.880 idea of there being an acquisition is the kind of 0:12:09.920 --> 0:12:11.920 news event that's going to bring people to the service. 0:12:12.280 --> 0:12:14.360 Just stick with us for a moment, because we've got 0:12:14.360 --> 0:12:16.840 a thirteen d as we like to get just on 0:12:16.920 --> 0:12:19.520 a Friday when everyone's going home. But we are getting 0:12:19.520 --> 0:12:23.600 some sort of undated d coming from Elon Musk of 0:12:23.640 --> 0:12:28.679 course regarding his bid for Twitter. And understandably this is 0:12:28.720 --> 0:12:30.240 a We're going to have to read through it in 0:12:30.440 --> 0:12:33.960 real time overall, but it seems to be once again 0:12:34.040 --> 0:12:36.679 updating us previously we've had sort of how much of 0:12:36.720 --> 0:12:41.520 the deal has basically got backing from from private sources 0:12:41.720 --> 0:12:45.240 as we understand, And and amend's the schedule thirteen D 0:12:45.360 --> 0:12:48.480 initially filed by Elon Musk with the SEC on April 0:12:48.520 --> 0:12:53.199 the five. With respect to the offer, it says amended 0:12:53.240 --> 0:12:56.600 on the eleventh or fourteenth and twenty one seven. I mean, 0:12:56.600 --> 0:12:58.000 it goes on to say all the other times that 0:12:58.040 --> 0:13:00.960 it's been amended overall, but it looks as though that 0:13:01.040 --> 0:13:04.320 they are amending adding the following the information that send 0:13:04.320 --> 0:13:06.959 a letter to Twitter formally notifying Twitter that the reporting 0:13:06.960 --> 0:13:10.920 person is terminating their Murger agreement. Kurt. The foregoing description 0:13:10.920 --> 0:13:13.600 and the reporting person's letter is qualified in its entirety 0:13:13.679 --> 0:13:15.840 by reference to the full text of the letter, a 0:13:15.920 --> 0:13:18.679 copy of which is attached here to an exhibit p 0:13:19.120 --> 0:13:22.920 and incorporated here in for reference. The letter. Therefore, I'm 0:13:22.960 --> 0:13:25.080 going to be opening up. This is real time reporting 0:13:25.080 --> 0:13:27.880 on Bloomberg as well at the moment. So it does 0:13:27.880 --> 0:13:29.880 seem as though, you know, MASKU has filed an amended 0:13:31.280 --> 0:13:33.920 and as I've been saying, it looks as though they 0:13:33.960 --> 0:13:37.040 are saying that they are terminating their murder agreements. So 0:13:37.280 --> 0:13:40.520 saying on July, what do you make of it? I mean, 0:13:40.880 --> 0:13:43.520 you're hearing me really out live on on air at 0:13:43.520 --> 0:13:45.200 the moment, and we're going to be rushing for every 0:13:45.240 --> 0:13:48.040 single reporter that's currently in the building. But do tell 0:13:48.120 --> 0:13:49.840 us as to whether or not this could well have 0:13:49.880 --> 0:13:53.320 been expected overall? They say, this is actually a letter 0:13:53.360 --> 0:13:56.920 that's dated to Twitter Inc. MS Gaddin says, we refer 0:13:57.000 --> 0:13:59.559 to the agreement in section six point four. They talk 0:13:59.640 --> 0:14:03.120 about the business for any reasonable business purpose related to 0:14:03.160 --> 0:14:06.840 the consummation of the transaction. Twitter has not complied with 0:14:06.920 --> 0:14:10.360 contractual obligations. It says, for nearly two months, Mr Musk 0:14:10.360 --> 0:14:13.480 has sought the data and face information necessary to make 0:14:13.520 --> 0:14:16.800 an independent assessment of the prevalence of fake or spam 0:14:16.840 --> 0:14:20.880 accounts on Twitter's platform. This information is fundamental to Twitter's 0:14:20.880 --> 0:14:24.640 business and financial performance, and he says, thus for thus 0:14:24.680 --> 0:14:28.760 far necessary, they say, and it's necessary to consummate the transaction. 0:14:28.840 --> 0:14:31.280 So it looks as though Mr Musk has decided that, look, 0:14:31.360 --> 0:14:32.920 we can't do it because we haven't got the right 0:14:32.920 --> 0:14:36.040 amount of information on bots. Do you see my face here? 0:14:36.320 --> 0:14:40.680 This is the base of someone who's learned, in who's learning. 0:14:41.560 --> 0:14:44.280 You know that the last three months of work and 0:14:44.320 --> 0:14:46.960 reporting that I've done is just kind of the tip 0:14:46.960 --> 0:14:48.520 of the iceberg here. It sounds like we have more 0:14:48.560 --> 0:14:52.160 to go. But am I surprised, not only because we've 0:14:52.200 --> 0:14:55.240 seen this move in this direction, right, We were just 0:14:55.280 --> 0:14:57.920 talking about that that they haven't been able to agree 0:14:57.960 --> 0:15:01.400 on this, and that you know, Elon seems very focused 0:15:01.440 --> 0:15:04.640 on reducing the cost of this deal. I will say 0:15:04.720 --> 0:15:07.520 I didn't expect or don't did not expect him to 0:15:07.600 --> 0:15:10.400 walk away from something entirely. Again, I thought that he 0:15:10.400 --> 0:15:13.360 would try to renegotiate. But you know, we need to 0:15:13.360 --> 0:15:15.800 go look at this further and figure out exactly what 0:15:15.840 --> 0:15:18.280 he's trying to do here. And maybe this is a 0:15:18.320 --> 0:15:22.760 first step towards a renegotiation. Right, but it certainly feels like, um, 0:15:22.800 --> 0:15:25.680 this thing that has been boiling for now a few 0:15:25.720 --> 0:15:30.320 weeks clearly is reaching the boiling point. Right. It says, 0:15:30.400 --> 0:15:32.960 of course, his financial advisors and Morgan Stanley have been 0:15:32.960 --> 0:15:36.040 requesting critical information from Twitter as far back as May ninth. 0:15:36.360 --> 0:15:38.440 How much have the bank has been involved in all 0:15:38.480 --> 0:15:40.800 of this? How much has you know, Musk had a 0:15:40.800 --> 0:15:44.320 lot of a lot of help and backers from elsewhere. Yeah, 0:15:44.360 --> 0:15:46.800 I mean he's had a whole lot of advisors throughout 0:15:46.800 --> 0:15:48.720 this whole process, right, I mean, these things are not 0:15:48.760 --> 0:15:52.080 It's not just Elon Musk and Paragua from Twitter sitting 0:15:52.080 --> 0:15:54.240 around hashing us out right. There are entire teams of 0:15:54.280 --> 0:15:56.920 people that are that are passing information, that have been 0:15:56.960 --> 0:15:59.640 in contact daily about this kind of stuff. I think 0:15:59.640 --> 0:16:03.040 the debate eight has been what is Twitter giving, uh, 0:16:03.240 --> 0:16:06.680 Elen and what is is Elon demanding? I think in 0:16:06.680 --> 0:16:08.680 this case, you know, Twitter has said, hey, we're gonna 0:16:08.680 --> 0:16:10.480 give you the fire hose of tweets. We're gonna give 0:16:10.480 --> 0:16:14.320 you every public tweet on the service. Um and Ellen, clearly, 0:16:14.360 --> 0:16:16.720 as you just read, is saying that's not sufficient for 0:16:16.720 --> 0:16:19.040 for calculating what I need to calculate, which is the 0:16:19.120 --> 0:16:21.960 percentage of box. And I think the real issue here 0:16:22.080 --> 0:16:24.280 is that there they just don't see eye to eye 0:16:24.280 --> 0:16:27.760 on this body issue, and clearly that's big enough for 0:16:27.840 --> 0:16:30.920 him to pull this offer. But again, it feels like 0:16:30.920 --> 0:16:32.720 we've been building this for some time. I have to 0:16:32.760 --> 0:16:35.040 imagine he had a little buyer's remorse, given that he 0:16:35.080 --> 0:16:36.880 made his bid in April and what we've seen, what 0:16:36.920 --> 0:16:39.040 the market has been doing the last few months since then, 0:16:40.000 --> 0:16:42.880 all of this makes it feel to me that I 0:16:42.960 --> 0:16:44.800 reiterate the same sort of question before. But this is 0:16:44.840 --> 0:16:48.200 destined for the courts, right, I think so? Right, because 0:16:48.240 --> 0:16:50.360 we as we again we were just talking about Twitter 0:16:50.400 --> 0:16:53.400 has said repeatedly we planned to enforce the merger agreement. Right, 0:16:53.440 --> 0:16:56.320 they have come to an agreement. So even him saying, hey, 0:16:56.360 --> 0:17:00.120 I'm pulling out from this thing Twitter, my understanding is 0:17:00.160 --> 0:17:03.440 that they legally can try and force him to buy 0:17:03.480 --> 0:17:05.440 the company for the price that he agreed to. So 0:17:05.800 --> 0:17:08.520 I don't know what him. Again, need to look closer 0:17:08.520 --> 0:17:11.119 at the filing. I learned about it just as you 0:17:11.160 --> 0:17:13.919 were reading it to me on on air here. But 0:17:14.040 --> 0:17:16.479 I do think that this feels like it's headed for 0:17:16.760 --> 0:17:20.680 a court. Just remind me of the break up fee. Yes, 0:17:20.760 --> 0:17:22.560 so there is a one billion dollar break up fee, 0:17:22.560 --> 0:17:24.760 but it's not as simple as Ellen just simply, you know, 0:17:24.800 --> 0:17:27.080 paying a billion dollars and walking away. There has to 0:17:27.080 --> 0:17:29.439 be other elements of the deal that kind of fall apart, 0:17:29.760 --> 0:17:32.480 and then he would pay that as a penalty. Again, 0:17:32.680 --> 0:17:34.680 it's not a fee that you can pay just because 0:17:34.720 --> 0:17:37.399 you feel like you wish you'd got a better deal. Cut. 0:17:37.560 --> 0:17:39.520 I can't say what would do without you. Thank you 0:17:39.560 --> 0:17:42.320 for being there in real time on Telly to be 0:17:42.359 --> 0:17:45.359 able to read through filing with me. We thank you 0:17:45.440 --> 0:17:48.200 so much. Kut whacking. So as we say, you know 0:17:48.359 --> 0:17:51.240 Musk is terminating his Twitter merger agreement, we understand a 0:17:51.280 --> 0:17:54.400 new thirteen D being filed joyfully on a Friday afternoon, 0:17:54.400 --> 0:17:57.080 just everyone wants to head out for a well deserved rest. 0:17:57.119 --> 0:17:59.280 He says that the Twitter has failed to provide essential 0:17:59.320 --> 0:18:03.399 information and hasn't complied with contractual obligations. All of this, 0:18:03.640 --> 0:18:07.399 of course regarding those all important bots. He says, shares 0:18:07.720 --> 0:18:12.080 of Twitter sinking and after hours join us a more Blomberg. 0:18:15.320 --> 0:18:18.560 We start with the disclaimer. This episode of Bloomberg Technology 0:18:18.680 --> 0:18:21.320 was taped just as the news broke that Elon Musk 0:18:21.560 --> 0:18:32.480 is terminating his deal to bout Twitter. Let's get back 0:18:32.520 --> 0:18:35.679 to the breaking news. Twitter shares falling after hours after 0:18:35.760 --> 0:18:39.040 Elon Musk has filed a thirteen D amended thirteen D 0:18:39.200 --> 0:18:41.679 saying that he wants to be backing out of the 0:18:41.800 --> 0:18:45.440 offer to be buying Twitter for billion dollars. He's terminating 0:18:45.600 --> 0:18:48.960 the merger agreements, saying it's failed to provide essential information 0:18:49.359 --> 0:18:53.240 and they sometimes ignored requests for information, and pleased to 0:18:53.280 --> 0:18:55.679 say that Alex Brinka is joining us. Now you are 0:18:55.680 --> 0:18:58.520 meant to be talking about another social media platform, and 0:18:58.560 --> 0:19:00.760 we're very pleased that you're going to take some questions 0:19:00.760 --> 0:19:03.960 on this new breaking news of Cools being dumped on 0:19:03.960 --> 0:19:06.960 a Friday afternoon annex. I'm really wonderful to have you 0:19:07.000 --> 0:19:08.960 back on with me. It's been a long time since 0:19:08.960 --> 0:19:12.200 we've spoken. Talk to us about what you're making of 0:19:12.320 --> 0:19:15.840 this particular move. We'll sort of saw it coming, Yeah, 0:19:16.040 --> 0:19:17.840 And I was looking at this letter here and you'll 0:19:17.880 --> 0:19:19.520 excuse me having a peek at my phone because it 0:19:19.680 --> 0:19:22.720 just hit the wire. Something that I think is super interesting. 0:19:22.920 --> 0:19:25.399 Um in this letter Elon Musk and the filing is 0:19:25.440 --> 0:19:30.000 basically trying to invoke, um, some of those requirements to 0:19:30.359 --> 0:19:33.639 break up this deal. Um. I see here he's saying, 0:19:34.119 --> 0:19:37.520 calling out the company, saying that the claim that fewer 0:19:37.560 --> 0:19:40.280 than five percent of its daily active users are false 0:19:40.400 --> 0:19:46.160 or spam accounts is dramatically understating, um, the spam accounts 0:19:46.160 --> 0:19:48.640 that are on the app. He's also, you know, there 0:19:48.640 --> 0:19:51.440 are some fighting words in here. I'm seeing him say 0:19:52.040 --> 0:19:55.560 this understatement might cause or is reasonably likely to result 0:19:55.600 --> 0:19:59.119 in a company material adverse effect in filing his terms. 0:19:59.119 --> 0:20:00.600 That means that would be some thing that would need 0:20:00.640 --> 0:20:03.280 to be disclosed to investors. But it does seem like 0:20:03.560 --> 0:20:08.240