Twitter stock falls after report says Biden admin weighing security review of Musk ventures

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CNN Business

Twitter shares fell as much as 8% in premarket trading on Friday as investors braced for some last-minute uncertainty surrounding Elon Musk’s $44 billion deal to buy the company.

The stock reaction, which rebounded somewhat later in the morning, followed a Bloomberg report that Biden administration officials are in early discussions about whether to subject some of Musk’s companies to national security reviews, including the planned takeover of Twitter (TWTR). When asked by CNN, the administration rejected the report, which cited people familiar with the matter.

“We are not aware of any such conversations,” National Security Council spokeswoman Adrienne Watson said in a statement. A Treasury spokesman said the Committee on Foreign Investment in the United States “does not comment publicly on transactions it may or may not be reviewing” by law and practice.

Among the equity investors who have pledged to provide financing to help Musk finance the deal are several foreign entities, including Qatar’s sovereign wealth fund and Saudi Arabia’s prince Alwaleed bin Talal, who was already one of the biggest Twitter investors before Musk’s proposed acquisition.

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In response to a tweet about the Bloomberg report, one user wrote: “It would be hysterical if the government stopped Elon from overpaying for Twitter.” Musk answered to that tweet with a “100” emoji, which usually indicates emphatic agreement, and a crying and laughing face emoji.

It’s unclear what impact, if any, the reported security review could have on completing a deal that has already been subject to months of uncertainty. Musk has a week left to close the deal or face a rescheduled trial in Delaware Chancery Court that could result in him being forced to acquire the social media firm.

Twitter declined to comment on the report about the potential review; Musk’s representatives did not immediately respond to a request for comment.

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By other accounts, the deal appears to be moving toward completion. In a separate report late Thursday, Bloomberg said Twitter and Musk’s bankers and lawyers are preparing the necessary paperwork to complete the deal. Bloomberg also reported last week that the company had frozen employee stock accounts prior to the completion of the deal.

In a conference call this week to discuss Tesla’s earnings results, Musk said he was “excited” about the Twitter deal, but also admitted he’s “obviously overpaying” for it. “Twitter’s long-term potential, in my opinion, is an order of magnitude greater than its current value,” he said.

The Washington Post reported Thursday that Musk told potential investors in the deal that he planned to ditch nearly 75% of the company’s staff and that Twitter had already planned mass layoffs even if the deal fell through, citing internal documents and Interviews with people familiar with the topic. Neither Twitter nor Musk’s representatives responded to requests for comment on the firing plans.

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Following the Washington Post report, Twitter General Counsel Sean Edgett sent a memo to staff saying the company “does not have any confirmation of the buyer’s plans after closing and advises not to follow rumors or leaked documents, but to wait.” facts from us and the buyer directly”. ”, according to a report by Bloomberg. A Twitter spokesperson confirmed to CNN the authenticity of the memo.

Musk had previously discussed slashing Twitter’s workforce in personal text messages with friends about the deal, which were revealed in court documents, and did not rule out the possibility of layoffs in a call with Twitter employees in June.

– CNN’s Matt Egan contributed to this report.


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