Shulou(Shulou.com)11/24 Report--

Beijing, Oct. 6 (Beijing time), Elon Musk (Elon Musk) seems to be about to make peace with Twitter, but there has been an obvious loser in the acquisition dispute: Musk himself, the richest man in the world.

Musk is willing to buy Twitter again, and experts say bankers, lawyers and Twitter employees involved in the dispute may also pay the price for the months-long legal battle.

Dan Ives, a technology analyst at Wade Bush Securities, likens Musk's acquisition to "buying a $2 pizza with caviar" (a metaphor for not buying good things at high prices). It was a bad deal for the billionaire. The same is true for more than a dozen investors who are willing to support the $44 billion acquisition.

But for Twitter, it has won a clear victory over a man who has been reluctant to budge in the past. At the same time, keeping Musk's acquisition promise will also benefit Twitter shareholders. Within Twitter, however, the prospect of Musk taking over the company has frustrated employees and raised concerns about future layoffs.

Big loser: Musk Musk's reversal in his acquisition of Twitter not only became a rare case in which he accepted failure, but also put him in a worse position when financing the deal.

He has repeatedly belittled the company he plans to acquire and helped drive down Twitter's share price. Twitter shares have fallen as much as 26% since Mr Musk made his first offer. Although Twitter's share price soared 22% after he reiterated his plans for the acquisition, observers believe Musk's offer is too high, especially compared to Twitter's main competitors. At $54.20 a share, Musk will pay more than twice the current valuation (price-to-sales ratio) of Meta and Snap.

Musk's Twitter account, meanwhile, Musk's personal wealth has shrunk as a result of the deal. Most of his wealth is linked to Tesla's share price. Investors worried that the acquisition of Twitter would distract Musk from focusing on Tesla's business, coupled with the fact that Musk was also selling Tesla shares to finance the deal, Tesla's share price fell sharply, causing Musk's price to shrink sharply in the months after the deal was announced.

When he agreed to buy Twitter in April, he was worth $257 billion, according to the Bloomberg Billionaires Index. Tesla's share price has fallen 28% since Twitter's board accepted Musk's offer on April 25. Musk's book value is now about $30 billion (210 billion yuan) lower than it was before the original agreement.

Mark Kelley and Thomes Doheny, analysts at Stifell, the US investment bank, said Mr Musk's actions also appeared to have had a negative impact on Twitter's operations. " We believe that the company he may soon own is not as attractive as it used to be. Since the initial announcement of the acquisition in April, employees have been leaving the company, and the product has been in an uncertain state. " They pointed out in the research newspaper.

Other losers: bankers and Twitter employees, with the exception of Musk, those who financed the deal lost the most. After months of tug-of-war with Twitter, major investment banks, including Morgan Stanley and Bank of America, will face the problem of financing the deal.

"from the bank's point of view, it's not ideal," he said. "the banks are desperate and they have no choice but to fund the deal."

To make matters worse, it is bad for banks to choose to move forward now, who are increasingly worried about the possibility of rising interest rates and a recession. Banks involved in the deal could face potential losses of "hundreds of millions of dollars" as they try to sell debt to investors, who are increasingly cautious about taking on riskier debt.

Investment banks are also losers the court battle also forced investors including Oracle founder Larry Ellison and Morgan Stanley CEO James James Gorman to disclose their scandals. As part of the pretrial forensics process, the two men were subpoenaed and text messages between investors and Mr Musk were made public.

Gerard Filitti, a senior lawyer at The Lawfare Project, an international non-profit legal think-tank and litigation fund in New York, said Mr Musk may have chosen to close the deal because his upcoming testimony could hurt some of his closest friends in business.

Another victim of the deal is Twitter employees. Harry Kraemer, a professor of management and strategy at Northwestern University's Kellogg School of Management, said the whole incident was "devastating" for Twitter employees.

"employees are the key to the business," says Mr Kramer. "instead of working, your employees spend most of their time figuring out who owns the company. Is my job secure? what impact will it have on my family? when you don't know what's going to happen next week, how do you plan a new product or development for the next year? such a plan will come to an abrupt end."

In fact, Twitter employees were holding a 2023 strategy meeting when the news came out that Musk had offered to buy the company again. Some employees worry that these meetings may become meaningless after the new owner takes over. Parker Lyons, a senior financial analyst on Twitter, posted a similar emoji on Twitter, suggesting that the company's 2023 plan is now "worthless".

Derek Horstmeyer, a finance professor at George Mason University, believes Twitter employees could be "in a difficult position" if Mr Musk takes over. "given the changes Musk wants to make, I expect a lot of people to resign." He said.

Winner: Twitter, its shareholder, became one of the few companies to win the battle against Musk, but not completely. Felicity believes that Twitter is getting what it wants while avoiding "hostility and high litigation costs, which would seriously harm the interests of the company and all people involved."

However, Paul Reagan, associate professor and associate director of the Delaware Institute of Corporate Law and Commercial Law at the Delaware School of Law at the University of Wade, points out that overall, the company still needs to recover from the uncertainty of the trial. And, in the future, it will be faced with a new owner who is reluctant to buy.

Twitter shareholders will benefit most from the incident, especially those who bought during the economic downturn. Activist investor Carl Icahn, for example, could make a lot of money from the deal. In the past few months, the billionaire investor and chairman of Icahn Enterprises has invested about $500m in Twitter. After Musk tried to exit the deal, he bought Twitter shares at a discount and will earn at least $250 million.

Pentwater Capital, a Florida hedge fund, will also profit from becoming one of Twitter's largest shareholders in the second quarter. If the deal goes ahead, Pentwater is now on track to make more than $200 million. Other well-known investors, such as Third Point and D.E. Shaw Group, have also bought Twitter shares at bargain prices and are expected to make huge profits.

"Twitter shareholders are the real winners. Musk paid a 50% to 75% premium for the company." Horst Meyer, a professor of finance at George Mason University.

Other winners: Twitter CEO, lawyers in this battle, Twitter CEO Palag Agrawal (Parag Agrawal) came across as very professional, even after a large number of private text messages between him and Musk were released. In these messages, Agravar is one of the few people who approach Musk without pandering to or reacting negatively to Musk's insults.

The Twitter CEO has refused to bow to Musk, despite Musk's attempt to abandon the deal. In April, Agrawal accused Musk of openly questioning the company's viability. "you are free to tweet and say,'is Twitter dying?'or anything about Twitter," Agrawal texted Max, "but it's my responsibility to tell you that in the current environment, it doesn't help me make Twitter better."

Agrawal, CEO of Twitter, Agravar is likely to lose his CEO position if Musk completes the acquisition. But if he does leave office, he will have a better image in the eyes of the public than his participation in court battles.

In the lawsuit, both Twitter and Musk hired more than 50 lawyers from several top law firms. Although lawyers may lose millions of dollars and lose the opportunity to argue in court, experts say that after lawyers spent months submitting nearly 1000 court letters and hundreds of subpoenas, Musk could still pay up to $200m in legal fees for himself and Twitter.

Arnadt Aaron-Baker, a professor of business law at case Western Reserve University, points out that litigation lawyers, M & A lawyers and senior partners at these well-known law firms can earn up to $2500 an hour. She estimates that Musk spends about $30 million on lawyers alone. Transperfect CEO Phil Shaw (Phil Shawe), a language services company, filed a lawsuit for his company in Delaware's Court of Chancery. He said Mr Musk could easily pay $7 million to $10 million a month in legal fees and more in the months leading up to the trial.

"the biggest winner in this dispute will be law firms," says Mr Kramer. "these people are going to make a lot of money."

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