Twitter and Mr Musk have so far worked together to finalize the deal, said one person with knowledge of the matter, although that dynamic can change quickly.
How Elon Musk’s Twitter deal unfolded
Mr Musk’s hand could be strengthened by the uncertainty his bid has created on Twitter, potentially making it difficult for the company to continue independently. The company is struggling to add users and generate more revenue, and on Thursday, Mr. Agrawal two top executives firedstopped hiring and promised to cut spending.
In his Friday tweets, Mr Agrawal said he was making changes because the deal with Mr Musk was not an “excuse to avoid important decisions for the health of the company.” He added that Twitter is part of an industry that is “in a very challenging macro environment — right now.”
Mr. Musk has agreed to use his personal wealth to fund the deal for Twitter, a plan hit by a recent slump in stock prices, including Tesla’s. Tesla stock has fallen nearly 30 percent over the past month. Mr. Musk sells Tesla stock as well as personal loan collateral to raise cash.
If a deal were to close, business challenges at Twitter could force Mr. Musk to keep turning to his Tesla stock to plug potential financial gaps. And any problem at Tesla that caused shares to fall far enough could trigger clauses in Mr. Musk’s personal loans that would require him to add more collateral, limiting his ability to invest in Twitter.
Tesla shares rose on Friday following Mr Musk’s comments.
The swings in Twitter and Tesla stocks that followed Mr Musk’s tweets could prompt scrutiny. The Securities and Exchange Commission charged Mr Musk with securities fraud in 2018 after he falsely tweeted that he had secured financing to take Tesla private, sending the automaker’s shares up 6 percent. Mr Musk and Tesla paid a $40 million penalty for the tweet. A shareholder lawsuit is pending against Mr Musk over the tweet.
“If I were his attorney, I’d spend all morning trying to figure out how this all affects federal security law,” said Marc Leaf, a partner at Faegre Drinker and a former attorney with the Securities and Exchange Commission.