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Why Elon Musk won't buy Twitter
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Why Elon Musk won’t end up buying Twitter

Everyone’s talking about Elon Musk’s $44 billion bid to buy Twitter. What changes will he make? Will he buy McDonald’s next? Will Trump be returning?

But did you notice the $1 billion penalty if he backed out of the deal? How about the news that Tesla’s stock has dropped 24% since his Twitter stock ownership was disclosed?

On its face, the overall deal may seem to make sense, but I disagree. Consider this:

• Tesla’s stock dropping so precipitously suggests shareholders aren’t happy with the deal and want him to instead focus on his primary business.

• Tesla’s stock peaked at $1,230 in November. At this writing, it’s down $277.35 per share. He owns 193.3 million shares, meaning focusing on his business could easily put $53.6 billion BACK into his pocket.

• Musk would pay $21.5 billion personally for Twitter, borrowing against Tesla stocks that are already leveraged for other acquisitions.

• China is responsible for half of Tesla’s production and one-fourth of its revenue. Beijing hates Twitter and could hold Tesla hostage.

• Twitter stock remains 11% below the buyout price, suggesting investors think it won’t happen.

Musk likes that everyone’s talking about him right now. His ploy’s generated millions in free publicity, making every company ask how their own marketing plans will be impacted?

It’s not unlike when he claimed financing to take Tesla private (none existed), paid a fine and kept going.

That’s why I suspect publicity was all he really wanted. He continues posting tweets that could scotch the deal, even as he lines up financing.

I believe he’ll back out, blame Twitter, and go home. He’ll have his Twitter stock and a seat on the board, or perhaps some greenmail to go away.

Since publicity’s no longer just sending out press releases and hoping they get noticed, you may want to also do something outrageous to garner attention. Arguably, the bigger, the better.

If you have the resources and are willing to risk someone calling your bluff, by all means, do it.

However, if you’re like most folks and like the idea but lack the funding, you may need to be a bit more imaginative.

There are still angles to pursue but don’t plan to buy a company just for the headlines it will generate.

With that said, I wish you a week of profitable marketing.

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