Elon Musk's Deal For Twitter Doesn't Pass U.S. Antitrust Review

Elon Musk’s acquisition of Twitter, which expires on Friday, will likely dodge a lengthy U.S. antitrust review. This is a typical scenario when the federal government requires companies to notify federal agencies of such deals in advance. That way, the agencies have at least 30 days to review the transaction and determine its legality. However, neither agency has requested additional information.

Elon Musk’s acquisition of Twitter

Although there’s no legal grounds for Musk to pull out of the Twitter deal, the stock price has fallen sharply after he tweeted that the deal is on hold. If Musk does decide to pull out, Twitter will be worse off, with a lower stock price, a shaken management team and an uncertain future. Musk could seek damages from Twitter for the damage done, but that’s unlikely to be much.

The deal has already triggered a regulatory review in the United States. The acquisition of Twitter by Elon Musk would have been subject to the approval of Twitter shareholders, but the waiting period expired last Thursday. Under antitrust law, deals must be disclosed to U.S. government agencies. The Justice Department and the Federal Trade Commission review such deals. Elon Musk had to notify both the Federal Trade Commission and the antitrust division of the deal before closing. The review period ended Thursday night, but the company still plans to seek additional financing commitments.

Elon Musk’s brash personality

The Twitter deal may have avoided a lengthy U.S. antitrust review because Musk’s public statement was an unusual maneuver for this stage of the negotiations, people familiar with the matter said. However, the tweets did raise questions about Musk’s intentions. Musk has 90 million Twitter followers, so if he walks away from the deal, the outcome could be messy. Musk’s tweets could also attract the attention of securities regulators and result in a massive legal battle.

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Regulatory scrutiny has also put pressure on the deal. Musk’s brash personality may have prevented a long U.S. antitrust review, which could have taken months. The Wall Street Journal reported that the SEC is investigating Musk after he failed to notify Twitter about the Twitter acquisition in a timely manner. Some employees of Twitter worry that his stance may mean a rollback of safety policies. But Musk has cautioned that he does not yet own Twitter, and has laid out a detailed plan for the company’s future. He also wants to restore the account of former president Donald Trump, which was banned following an attack on the U.S. capitol in 2021.

Elon Musk’s political identity

Since the acquisition of Twitter by Tesla, Elon Musk has roiled the markets and sparked speculation about his motives. In response to CEO Parag Agrawal’s tweets about spam, Musk sent a poop emoji to Twitter. Earlier this week, he suggested that he might seek a lower price for the company based on the number of fake accounts on the social network. While the price remains unspecified, analysts have speculated that the deal could be put off or he may simply want to back out of it. Elon Musk has previously said he wants to buy the company at a cheaper price and “own the liberals”.

Elon Musk’s plan to buy a small-animal practice

Whether Musk’s plan to buy a small animal practice for Twitter will pass a U.S. antitrust review is still a question. Despite being the world’s richest person according to Forbes’ real-time wealth index, Tesla stock has lost 30 percent in a month. Last week, Musk disclosed $7 billion in funding from investors including Oracle founder Larry Ellison, cryptocurrency exchange Binance, and Saudi Prince Alwaleed bin Talal.

The plan is expected to pass antitrust review because Twitter is an “entity” that censors its users. Moreover, the free speech protections in the U.S. typically protect governments and not private companies. As Musk himself has said, Twitter has too strict rules and has become censorious. Hence, it is not clear how Twitter can pass antitrust review without a lengthy antitrust review.