Could Elon Musk Lose $44 Billion in Three Days?
Sep 29, 2022
It's a money period for Elon Musk. If summer is over, fall is off to a flying start for the world's richest man.
At the end of September, the software magnate will make critical appointments that will have a significant influence on the empire he is building. These appointments may also have an impact on the image of the revolutionary and visionary boss that he is constructing.
These appointments are related to two issues: the unexpected withdrawal of his deal to acquire the social network Twitter for $44 billion and his pledge to showcase a sophisticated humanoid robot that would be available for purchase in 2023.
Deposition to Come
Twitter lawyers quizzed Musk on September 26 and 27, seeking the Delaware Court of Chancery to compel the entrepreneur to honor his earlier agreement to purchase the platform.
Musk's stakes are monetary, as he personally desired ownership of the social network. If he loses, he will be forced to give over $44 billion of his wealth, mostly Tesla shares. However, prior to his surprise resignation on July 8, Musk had managed to garner the backing of partners.
If Twitter loses, it is not impossible that the platform's market value, which is a gathering place for trendsetters and opinion makers, would suffer greatly since worries about its viability will definitely resurface. Musk's justification for abandoning his bid is that the social network is lying about the number of spam bots, or phony accounts, on its site. On the other hand, advertisers consider the number of users on a social network when deciding whether to promote their products and services there.
Twitter has traditionally claimed that fake accounts make up less than 5% of its user base, while Musk says the proportion is closer to 20%. It should be noted, however, that the billionaire took the choice to make a bid without first doing due diligence, as is typical in mergers and acquisitions.
Twitter says Musk altered his mind after seeing the markets affected by recession worries. Essentially, it comes down to money or pricing. Twitter shares are now trading at $41.58, $13 less than Musk's offer of $54.20 a share on April 25 to acquire the entire company, of which he had previously been the largest shareholder with a 9.1% holding since April 4.
What To Expect Next ?
On April 22, the penultimate trading session before Musk's offer announcement, Twitter shares ended at $48.93.
According to a court document, the deposition, which can be prolonged until September 28, is scheduled to take place in a legal office in Wilmington, Del.
A five-day trial before Delaware Court Chancellor Kathaleen McCormick is planned for October 17.
Regardless of the outcome of the testimony, Musk's September 30 appearance is expected by supporters and opponents alike. During a day devoted to developing artificial intelligence at Tesla, Musk is expected to show a working robot-humanoid Optimus, which will replace humans in Tesla factories.
This is the second iteration of Tesla AI Day, which started in 2021.
"Tesla AI Day has been postponed to September 30 since we may have an Optimus prototype running by then," Musk tweeted on June 2.
The billionaire stated in January that a prototype Optimus would be ready by the end of the year and would be available for purchase in 2023.
There has been no word on what Optimus will be capable of.
The question is whether Musk will follow through.
"The Optimus humanoid robot, I believe, is the most important product development we're doing this year. This, I believe, has the potential to be more significant than the automobile industry over time. "During the first-quarter results call, the tech tycoon stated.
This is a significant bet because Musk has failed to get people excited about Optimus. The Optimus concept is motivated by the mogul's goal to replace humans in his factories with robots. It was unveiled in August 2021, during the inaugural Tesla AI Day.
Optimus seems to be a person dressed in a robot costume, standing over six feet tall and weighing 125 pounds. Musk indicated at the time that it would employ the same AI algorithms that helped power Tesla automobiles.
According to the firm, Optimus will help with monotonous activities throughout the factory. Tesla aims to create 20 million vehicles per year, up from over one million in 2021. Musk has stated that the humanoid robot might bring in a day where "physical labor will be a choice." According to the millionaire, this might eventually lead to "universal basic income."
However, Musk admitted in 2018 that too much automation might be a "wrong decision."
"Yes, Tesla's over-automation was a mistake. To be more specific, that was my fault. Humans are underrated, "At the time, the millionaire stated.