Is Elon Musk beating Wall Street at its own game?

A takeover is not unlike a game of chess. One side makes a move, and the other must react, and sometimes forfeit an advantage. In Elon Musk’s case, it appears that his tweet to put the Twitter deal “on hold” could be a masterstroke, and don’t be surprised if this week we see him try to renegotiate the deal’s price.

On early Friday morning, Musk tweeted out that the Twitter deal was on hold, attaching a Reuters story about how fewer than 5% of the company’s users were spam accounts. Musk shortly after said that he is still committed to closing the deal and seeing it through, but not before shares of the company had tanked in pre-market trading. You have to wonder how that one landed at the Securities and Exchange Commission, which has given Musk grief over allegedly misleading investors in the past. But then, as my colleague Shawn Tully writes, you also have to wonder whether this is part of some larger, well-orchestrated plan for Musk.

In Tully’s words:

Most likely, Musk’s May 13 moves are part of a chess game where the master’s maneuvering to either pay far less for Twitter than his original $46.5 billion offer, or walk away if its directors don’t cave.

Here’s the exact wording in the deal, referring to the $1 billion fee for Musk to walk away: “The Termination Fee shall constitute the sole and exclusive monetary remedy of the Parent [Musk] as a result of the failure of the transaction to be consummated.”

It’s entirely surprising, James Woolery, founding partner in law firm Woolery & Co (who has worked on deals including Clorox’s defense versus Carl Icahn, Dell’s campaign to go private, and Medco health’s merger with Express Scripts) told Tully. “The dynamic on this deal is beyond belief,” he said. “The Twitter board did the deal virtually overnight. It looks rushed, as if they were so happy to get the offer they didn’t demand the right protections.” 

Woolery adds: “The Twitter board handed him incredible leverage that I’ve never seen in any other deal. Instead of being potentially liable for the entire $40 billion-plus purchase price, the board effectively gave him an $1 billion ‘option’ to buy Twitter. He should be facing liability of between $1 billion and over $40 billion.” Instead, marvels Woolery, the most Musk risks by exiting is a $1 billion breakup fee, while by threatening to depart, he could shave many billions from his offer––a deal the Twitter board would be hard-pressed to reject.”

Twitter is bleeding key employees: Two of its top executives, head of product Kayvon Beykpour and head of revenue product Bruce Falck are leaving the company, due to CEO Parag Agrawal allegedly wanting to “take the team in a different direction.”  And other tech stocks aren’t performing well on the market—meaning that Musk appears to be in a strong position to try to re-price the purchase cost.  He may be able to reprice the transaction in the low $40s, potentially getting a 25%, or $11 billion, discount from his $46.50 offer.

Or he might simply walk away and pay up $1 billion. “That’s a tiny fraction of his net worth, and perhaps not even that,” Tully writes.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
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Jackson Fordyce curated the deals section of today’s newsletter.


- Dock, a São Paulo-based full-stack payments and digital banking platform in Latin America, raised $110 million in funding. Lightrock and Silver Lake Waterman led the round and were joined by investors including Riverwood Capital, Viking Global Investors, and Sunley House Capital

- 6K, a North Andover, Mass.-based plasma technology company, raised $102 million in Series D funding led by Koch Strategic Platforms and was joined by investors including Energy Impact Partners, Albemarle, HG Ventures, and others. 

- Komodor, a Tel Aviv-based Kubernetes troubleshooting platform, raised $42 Million in Series B funding led by Tiger Global and was joined by investors including Felicis, Accel, NFX Capital, OldSlip Group, Pitango First, and Vine Ventures

- Tidio, a Szczecin, Poland-based customer service platform, raised $25 million in funding from PeakSpan Capital, Inovo Venture Partners, and InPost founder and CEO Rafał Brzoska

- Sustain.Life, a New York-based sustainability management software provider, raised $16 million in seed funding. Tapestry VC and Sustain.Life co-founder Mike Hanrahan co-led the round and were joined by investors including Active Impact Investments, Kompas, Agya Ventures, and Seyen Capital

- Predibase, a San Francisco-based declarative machine learning platform developer, raised $13.5 million in Series A funding led by Greylock and was joined by others. 

- Reverence, a New York-based in-home digital health company, raised $9.5 million in funding led by Target Global

- Faye, a Tel Aviv-based travel insurance startup, raised $8 million in seed funding led by Viola Ventures and F2 Venture Capital and was joined by investors including Portage Ventures, and former NBA player Omri Casspi


Adani Group agreed to acquire Holcim, a Zug, Switzerland-based buildings materials manufacturer, for $10 billion.  

- Crowd Content Media, backed by Sage and Cetina, acquired Content Refined, a Collingwood, Ontario-based content marketing platform. Financial terms were not disclosed. 

GTCR agreed to acquire a majority stake in PathGroup Findings, a Brentwood, Tenn.-based laboratory services company, from Pritzker Private CapitalPritzker Private Capital and Vesey Street Capital Partners retained a minority stake. The deal values PathGroup at $1.2 billion including debt, according to Bloomberg.

- EQT agreed to acquire Redwood Capital Group, a Chicago-based investment manager. Financial terms were not disclosed.


- Emirates Telecommunications Group Company acquired a 9.8% stake in Vodafone Group, a Berkshire, U.K.-based telecommunications company for $4.4 billion.

- MakerBot, a Brooklyn-based 3D printing company, and Ultimaker, an Utrecht, Netherlands-based 3D printing company, agreed to merge. The deal is backed by NPM Capital and Stratasys and is valued at $62.4 million. 

- Mobilitie agreed to acquire Signal Point Systems, a Kennesaw, Ga.-based telecommunications infrastructure provider focused on U.S. military bases. Financial terms were not disclosed.


- Samba TV, a San Francisco-based software provider for television advertising and analytics,  withdrew its $75 million IPO plans. 

- Galderma, a Zug, Switzerland-based skincare company, delayed its $22 billion IPO plans amid market volatility, according to Reuters.


- Amprius Technologies, a Fremont, Calif.-based lithium-ion batteries developer, agreed to go public via a merger with Kensington Capital Acquisition Corp. IV, a SPAC. A deal is valued at $939 million. 


- Contrary, a San Francisco-based venture capital firm, hired Kyle Harrison as a general partner. Formerly, he was with Index Ventures

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