Musk made an offer, and Twitter couldn’t refuse, but that doesn’t mean he can buy it just yet. Elon Musk’s Twitter acquisition has to be approved by U.S. regulators first. While there is no sure answer as to what could happen, there are some points that regulators may consider in the deal.
Firstly, Twitter is one of the world’s largest social media platforms, with over 200 million active users. That alone gives Musk control over a platform where the world talks. Secondly, Elon Musk has been one of Twitter’s most active users. So active that his tweets caused him to lose his Tesla chair.
Three reasons Musk’s Twitter deal could be stopped
There are three key reasons that could result in Elon Musk’s Twitter takeover coming to a halt.
Musk and SEC’s old issues
Elon Musk has existing beef with the SEC. This could also be a bone of contention between the billionaire and his Twitter acquisition. Some of Elon Musk’s older tweets caused havoc in the market. He tweeted about taking Tesla private.
The tweet caused him to lose his chair at Tesla. He was also fined $20 million for the same. Lastly, as a result, his tweets are supposed to get the SEC’s green light before they go live. So for someone who is to get their tweets approved beforehand, owning Twitter could be difficult.
Twitter shareholder sued Musk
Another issue with Musk’s acquisition of the social media platform could be the ongoing case against him. A Twitter shareholder has sued Musk over late disclosures of his stake in the platform. The lawsuit claims that Musk’s move caused a loss of followers between the time of his acquisition and disclosing his stake.
This is a relatively mild problem and could go away if shareholders agree to settle with Musk’s offer. But just in case the lawsuit flies, it could be a bone of contention.
Social media and billionaires
This is the final reason that could spell trouble for Musk’s Twitter takeover. Elon will be a single entity owning a social media platform with over 200 million active users. This alone could be alarming for regulators trying to break up big tech.
With a wave of antitrust cases going around and Musk’s moves on the SEC’s radar, these are the reasons that could prevent the ultimate takeover from happening.
What if it goes through?
While the above reasons are scenarios where Musk fails to take over Twitter, there’s also a strong possibility that he could succeed. If he does, Elon promises free speech, an open algorithm, removal of bots, and a subscriber-based revenue model.