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The entire Elon Musk-Twitter blowup … in two minutes

New York CNN Enterprise  — 

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HERE WE GO AGAIN…

In case you spent final week ignoring information alerts about Elon Musk, like I did, you could be in want of a fast catch-up. So let’s dive in.

The TL;DR model: Musk is pulling out of his $44 billion settlement to purchase Twitter (for causes we’ll get into in a second), however Twitter goes to attempt to drive him to acquiesce to the unique deal. In brief: They’re virtually definitely going to should duke this out in courtroom.

To those that’ve been following this totally bananas story, Musk’s newest transfer is hardly a shock. Right here’s why:

  • Just about everybody agrees he was massively overpaying for Twitter. The corporate’s shares have misplaced a 3rd of their worth since late April, when Musk made his provide. Twitter inventory fell additional on Monday, to round $34 a share. Musk’s provide was $54.20 a share — so it’s not onerous to see why Twitter’s board isn’t going to let him stroll away with no struggle.
  • The bot difficulty: From Day One, Musk has been elevating a stink about “spam bots” and accusing Twitter, with out proof, of deceptive buyers about the actual variety of these accounts on the platform.
  • JUST TO BE CLEAR: Twitter does have a spam downside, but it surely appears apparent this pet difficulty of Elon’s is a pink herring. The financials of this deal simply make no sense, particularly since we entered a bear market that’s dragged down Twitter and Tesla, whose shares make up the majority of Musk’s wealth. In different phrases, Musk has gotten poorer and Twitter’s gotten cheaper, so he’s understandably trying to renegotiate or scrap it utterly.
  • It’s Elon Musk. The man’s a free cannon.

So what occurs now? There are a lot of potentialities, none of that are slam dunk for anybody concerned.

  1. The break-up. In idea, Musk may pay a $1 billion break-up price and everybody can return to pretending this by no means occurred. That sounds good for Musk, but it surely’s extra sophisticated for Twitter’s board, which could possibly be breaching its fiduciary responsibility to shareholders by letting him stroll. That might doubtless rattle Twitter’s already anxious buyers.
  2. Twitter may drive Musk to purchase it beneath the unique phrases if it may persuade a decide it has upheld its finish of the deal. That’d be nice for Twitter shareholders, much less nice for Twitter’s workers and customers if the platform is begrudgingly beneath the reign of a person who was pressured to overpay for it and who’s stretched skinny working Tesla and SpaceX. (Musk lol’d at that the suggestion he’d be pressured to purchase Twitter in a predictably infantile tweet on Monday.)
  3. Negotiating a greater value. As the 2 sides put together for litigation, they’ll additionally maintain speaking, and the state of affairs may resolve itself by way of a negotiated sale value. That sort of decision is widespread in merger disputes, my CNN Enterprise colleagues report.
  4. Any variety of wild playing cards. With Musk, it’s protected to count on the sudden.

One factor’s sure: A handful of legal professionals for Twitter and Elon Musk are incomes their paychecks this summer season.

NUMBER OF THE DAY: $1.004

For the primary time in 20 years, the euro and the US greenback are lower than a penny away from parity.

The euro hovered round $1.004 Monday morning, down 12% because the begin of the 12 months. Why? The European forex is getting battered by inflation and issues about power provides. The greenback, in the meantime, is rallying as buyers draw back from threat and park their cash in protected havens.

Some analysts say the euro may maintain falling, which is nice information for Individuals touring to Europe this summer season, but it surely’s not nice for world financial stability, my colleague Nicole Goodkind explains.

CASH CRISIS

This spring, a handful of rural Chinese language banks all of the sudden suspended money withdrawals, leaving tons of of individuals unable to entry their financial savings. The banks provided no rationalization of why, or how lengthy the accounts can be frozen.

Naturally, these individuals are livid — it’s been three months of making an attempt in useless to unfreeze their accounts.

The information: On Sunday, the depositors staged their largest demonstration but — a uncommon present of public dissent in China. Round 1,000 individuals gathered exterior a department workplace of the central financial institution in Henan province, demanding the federal government step in to assist them retrieve thousands and thousands of {dollars}’ price of frozen funds.

It was a peaceable gathering, however authorities responded with drive, my colleague Nectar Gan studies. In a conflict that lasted a number of hours, safety officers charged on the group, dragging protesters down stairs and beating those that resisted, together with girls and the aged, in accordance with witnesses and social media movies.

BIGGER PICTURE

That wildly disproportionate response speaks to a broader present of hysteria among the many management in Beijing.

The nation’s strict zero-Covid coverage has hamstrung China’s financial restoration. When the federal government studies GDP information this Friday, economists count on it’ll be the weakest since 2020 early 2020, when the pandemic hit.

In the meantime, shares are hemorrhaging over issues a few continued regulatory crackdown on tech firms. China’s housing market, which accounts for 20% of GDP, is crumbling. Retail gross sales are manner down.

All of this whereas President Xi Jinping is broadly anticipated to hunt an unprecedented third time period later this 12 months.

Beijing’s leaders know all too nicely the phrases of the social contract that underlies public life in China: Residents will put their religion within the central authorities and usually not make a lot fuss about particular person freedoms in trade for the promise of prosperity. That contract begins to fray when the financial engine that lifted tons of of thousands and thousands out of poverty in a era begins to sputter.

With its violent crackdown on depositors — who’re legitimately frightened their life financial savings simply evaporated — China is sending a transparent message that its individuals should take the financial hits on the chin and fall in line irrespective of how dangerous issues get.

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This text was initially revealed by cnn.com. Learn the unique article right here.

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