Bonus Episode: Elon Musk v. Twitter — with William Cohan

Market Reactions

The market's reaction to Elon Musk's proposed acquisition of Twitter is complex, with significant implications for financing. Scott Galloway and William D. Cohan discuss the challenges Musk faces in securing both debt and equity financing. While lenders might be willing to provide secured debt based on Twitter's assets, the equity side poses more difficulties. Few investors are eager to invest at the offered price, given the current market conditions 1.

I'm certain that they could make that argument. What we don't know about Elon and his personal balance sheet is what other cockamamie things he's done.

--- William D. Cohan

This situation could potentially allow Musk to argue in court that he couldn't secure the necessary financing, although his substantial Tesla stock holdings might counter that claim 2.

   

Valuation Concerns

Valuation concerns are at the forefront of discussions surrounding Musk's offer for Twitter. William D. Cohan highlights the disparity between the offer price and Twitter's perceived market value, suggesting that the board might accept a lower offer if it remains within a "band of fairness" 3. The chaos Musk brings to the table is another factor, with Scott Galloway noting the potential damage to Twitter's internal stability and market perception.

My attitude right now would be, we're closing. We'll see you closing. We're hoping to see you on closing.

--- Scott Galloway

The uncertainty surrounding the deal has led to speculation about a possible renegotiation of terms or a breakup fee, with the board likely to resist offers perceived as too low 4.