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Why Elon Musk Terminated The $44 Billion Twitter Deal ?

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Elon Musk, the chief executive officer of Tesla and the world’s richest man, is looking to pull out of his $44 billion bid to buy microblogging platform Twitter.

In a filing with the US Securities and Exchange Commission (SEC), Musk said that he wanted to terminate the deal because Twitter was in “material breach” of their agreement and had made “false and misleading” statements during negotiations.

The social media company, meanwhile, has said it plans to pursue legal action to enforce the agreement.

Musk’s action to bail out of the deal marks the latest twist in a long-running saga after he decided to buy Twitter in April.

Why Musk is backing out of the deal

Musk has claimed that Twitter has not provided him with necessary information on the prevalence of fake or spam accounts on its platform, a concern he had first raised in May. At the time, he had said that the deal was “temporarily on hold”, until he received the data from Twitter, which had asserted that spam and bot accounts make up less than 5 per cent of its total users.

In his filing with the US SEC, Musk’s legal team said that “for nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform…Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information”.

Musk also said he was pulling out because Twitter fired senior executives and a third of its talent acquisition team, breaching Twitter’s obligation to “preserve substantially intact the material components of its current business organisation.”

While these are broadly the two main reasons that Musk has intimated the SEC for terminating the deal, a number of external factors could have also played a role in his decision. Firstly, tech stocks globally have seen a massive correction since the deal was announced. On Friday, Twitter’s stock on the New York Stock Exchange closed at a value of $36.81, compared to $51.70 on April 25 when the company had accepted Musk’s offer, a decline of nearly 29 per cent. Tesla’s stock price has fallen by more than 24 per cent since the deal was announced.

Secondly, there were also question marks around how Musk would finance the $44 billion deal. In May, Musk had told the US SEC that the deal would include $33.5 billion in equity, up from an earlier commitment of $27.25 billion. He had also sold Tesla stock worth around $8.5 billion and had lined up about $7 billion from investors including Prince al-Waleed bin Talal of Saudi Arabia. However, he had told the SEC that he was continuing to seek additional financing and was in talks with Twitter shareholders, including former Twitter CEO Jack Dorsey, about potentially retaining their stakes in the company. It is unclear if Musk has managed to raise enough money to finance the deal.

What happens next?

Musk and Twitter could be looking at a lengthy legal battle, as the social media platform has made it clear that it will pursue legal action to enforce the terms of the deal.

“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” said Twitter’s chairman Bret Taylor. The original merger agreement also includes a $1 billion break-up fee.

According to Reuters, disputed mergers and acquisitions that land in Delaware courts more often than not end up with the parties re-negotiating deals or the acquirer paying the target a settlement to walk away, rather than a judge ordering that a transaction be completed.

The many twists and turns in the Musk-Twitter deal

Musk started buying Twitter’s shares in January 2022, and his shareholding in the company subsequently rose to over 5 per cent in March and 9.2 per cent in April, making him the largest individual stakeholder in the company.

On April 4, Twitter’s CEO Parag Agrawal announced that Musk would be joining Twitter’s board, however, just four days later, on April 9, Musk told the social media company that he would not take a board seat, and instead make an offer to take the company private.

On April 14, Musk made his offer to buy Twitter for $44 billion, leading to Twitter’s board adopting a ‘poison pill’ strategy to thwart any attempts of a hostile takeover of the company. After Musk made details of his financial plan known, mentioning that he has secured commitment to raise $46.5 billion, the company on April 25 accepted his original $44 billion offer to buy Twitter and take it private.

In the subsequent weeks, Musk sold Tesla shares worth around $8.5 billion and raised $7.1 billion to finance the deal from the likes of Prince al-Waleed bin Talal, Sequoia, Binance, a16z and others.

Soon after that, Agrawal announced that two top Twitter executives, Kayvon Beykpour and Bruce Falck, will leave the company. He also announced a hiring freeze and other cost-cutting measures.

On May 14, Musk said that the Twitter deal was “temporarily on hold” flagging fake and spam accounts on the platform as a concern.

Despite Agrawal’s explanation that less than 5 per cent of its users are spam or fake accounts, Musk said that the deal “cannot move forward” without proof on fake accounts.

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The reclusive owner of OnlyFans rakes in more than $500 million from the adult website in less than 2 years, report says

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Cardi B performs at the Wireless Festival in London in July.

The adult content plaform’s viewers jumped by 128% and the number of creators rose by a third.Revenues soared from $358m to $932m last year, according to the annual report seen by Bloomberg.

The owner of OnlyFans has been paid more than $500 million since 2020, Bloomberg reported.

The Ukrainian-American businessman Leonid Radvinsky received dividends amounting to $284m in 2021 and $233m after November 2021, the company stated in its annual report, which was seen by Bloomberg.

The adult entertainment site enjoyed a boom in its user base last year, with two million content creators raking in almost $4bn in 2021, per the report. It also features non-adult content from celebrities such as rapper Cardi B and DJ Khalid for paying fans.The number of content viewers jumped by 128% year-on-year, while the number of content creators rose by 34%. The platform, which takes a 20% commission fee from creators, more than doubled its revenue from $358m in 2020 to $932m in 2021, Bloomberg reported.

Pre-tax profits also soared from $61m in 2020 to $433m in 2021 as users flocked to the platform during the pandemic.

“We are empowering creators to monetize their content and have real control over it,” Amrapali Gan, chief executive of OnlyFans, told the BBC. Gan, who had been at the company since 2020, took over as CEO in December 2021 after Tim Stokely stepped down. The London-based company was founded in 2016 by Stokely before he sold a 75% stake to Radvinsky, 40, two years later.

The Florida-based business figure keeps a low public profile but has run porn websites for more than two decades through his company Cybertania, the Daily Telegraph has reported.In August last year the platform announced it would ban sexually explicit content but reversed the decision six days later following an outcry from creators. The company laid off an unspecified number of employees last month to reshape certain teams, it told Insider in a statement.

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Ghana Cedi declared worst performing currency worldwide by Bloomberg

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Cedi tagged the worst performing currency worldwide

The latest report by Bloomberg has tagged the Ghana Cedi as the worst performing currency in the world currently.

According to Bloomberg, the Ghana Cedi is currently in tatters, haven depreciated by over GHC2 in the last week, compounding the ever-depreciating currency against major foreign currencies.

The Cedi fell 1.6% on Tuesday, August 16, extending this year’s slump to 35% and making it the world’s worst performer among 150 currencies tracked, after bankrupt Sri Lanka’s rupee,” Bloomberg indicated.

Bloomberg tracked the performance of 150 currencies in the world and the Cedi placed last in terms of performance since the beginning of the year.

In less than 8 months, the Cedi has come under intense exchange rate pressure due to its continuous depreciation to some major international currencies such as the Dollar, Pound and Euro.

According to data put out by the Bank of Ghana, the Cedi began the year at $1.00 to GH¢6.02.

Just a month ago, one could exchange $1.00 for GH¢7.43, and in less than 20 days, traders needed an average of GH¢9.37 to buy $1.00.

This means the Cedi has lost most than GH¢3.30 of its value to the dollar in less done 8 months.

Ghana’s economy is struggling to survive as inflation continues to dictate its fall. The implications of the continuous fall of the Cedi is already being felt by the ordinary Ghanaian.

Ratings from Fitch and S&P also saw the Cedi rating falling further to junk this month.

Following the current woes of the economy, the Central Bank is holding an emergency Monetary Policy Committee (MPC) meeting today. The BoG is expected to “review recent developments in the economy” during the meeting.

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Togo: Cement-Maker Cimtogo Raises Its Prices By 15%

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Cimtogo, a cement company, has upped its delivery costs from its plants in Lomé and Kara to distribution points. The measure became effective on August 1, 2022.

The company attributed the decision to the “recent measures that led to the increase of oil products in the country.” Its commercial directorate added that the price increase will “help ensure the continuity of carriers’ activities in the best conditions.”

It should be noted that Cimtogo’s cement is currently sold at CFA81,000 a ton throughout the country.

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