š¦ Twitter comes for Elon
Hey Snackers,
If you missed the free Slurpees at 7-Eleven on 7/11, hereās a consolation prize: Costco said its long-standing $1.50 hot-dog-and-soda combo will stay priced at $1.50. āFlation-phew.
Stocks fell yesterday, led by tech, as US investors mentally prepped themselves for Juneās consumer price data. Inflation numbers drop tomorrow.
Twitter says Elonās attempt to end his $44B buyout is āinvalid,ā leaving the social biz between a rock and a Musk place
Cancel order... Easy for pizza. Harder when your order is a $44B merger with a public company. In case you've been living under a SpaceX rocket: Elon Musk is backing out of his bid to buy Twitter ā or at least he's trying to. A quick timeline of the saga:
- Mid-April: After becoming Twitter's largest shareholder with a 9% stake, Elon offers to buy the rest of Twitter's shares at a 38% premium to their price.
- Late April: After a few weeks of "omg Elon wants to buy Twitter I'm so sad/happy" drama, Musk reaches a deal to buy Twitter for $44B.
- Early May: Musk announces plans to boost Twitter's revenue and make it a "free speech" platform. But never mind: the deal's on ice as Elon investigates the # of Twitter bots.
- Late May: Elon says Twitter undercounts bots on its platform, claiming that 20% are "fake/spam accounts." The deal can't move forward till he gets more info.
- Now: Elonās moving to terminate the deal over the bot thing, but Twitter is "committed to closing the transaction" at the agreed price ā and has reportedly hired lawyers to sue. Yesterday Twitter called Elonās attempt to terminate the deal āinvalid.ā
Twitter-finger jitters... This situation is a big #facepalm, especially for Twitter shareholders. Twitter stock soared in April after Elon agreed to buy it at a premium of $54.20/share ā which would make Twitter worth $44B. The stockās dropped 16% since Thursday, giving Twitter a $25B market cap.
Expectations breed disappointmentā¦ Nothingās really changed about Twitter: itās still the same biz, where revenue and user growth are slowing. But expectations of a pricey Elon-quisition boosted its value. Now all possible results look bad for Twitter: either it forces someone who doesnāt want to run Twitter to buy Twitter, or it loses an expected multibillion-dollar payday for investors.
The world's largest crypto exchange reportedly let Iranian users trade despite sanctions, which could bring more regulatory heat
Bad spotlightā¦ The biggest crypto exchange on the block could be in for some US regulatory scrutiny. Reuters reported that Binance allowed Iranians to trade on its platform, despite 2018 US sanctions and an internal company ban. The sanctions were designed to curb money movement for Iranās nuclear program and financial support for its proxy states in the region. Human-rights activists said they hurt ordinary Iranians.
- In 2019 and 2020: Binance employees reportedly internally celebrated their Iranian user base. Iranians said they liked the exchange because until mid-2021 all you needed to trade was an email address.
- Last year: The blockchain behemoth, which claims 120M users, tightened its anti-money laundering ā booting Iranian customers in the process.
- Now: It's unclear what consequences Binance might face (if any) since its main exchange is not a US company.
Bad timingā¦ Being accused of letting customers evade sanctions is never a great look, and it follows increased global calls for crypto regulation. The European Central Bank is pushing for stablecoin regs, and last week the US Treasury said governments need to come together to make it harder to launder with crypto.
Cryptoās big value prop is double-sidedā¦ It's supposed to be permissionless: traders don't need a third party (like a bank) to approve transactions. But not everyone's a fan: regulators highlight this feature as a global financial risk that can empower criminals and sanctioned countries. When industry titans like Binance make headlines for not playing by the rules, tougher regulations likely arenāt far behind.
What else weāre Snackinā
- Leak: The Uber Files ā 124K leaked documents spanning five years during ex-CEO Travis Kalanickās tenure ā reportedly show the ride-hailer breaking local laws and lobbying world leaders including President Biden.
- Counter: The FDA received its first application to sell a contraceptive pill over the counter. Parisā HRA Pharma wants to sell its non-prescription āminiā birth-control pill in the US.
- Mine: A heat wave forced nearly all industrial-scale bitcoin miners in Texas to shut down in one of the worldās largest crypto-mining hubs ā and could cause more energy outages.
- Exit: US homebuyers are canceling deals at the highest rate since the pandemic began as soaring mortgage rates and inflation make house-hunters reconsider.
- Hazard: Ford recalled 100K more cars over an engine-fire hazard, adding to its recent speedbumps ā three safety recalls in the past two months. This year its stock is down 48%.
Tuesday
- NFIB small-business index
- Earnings expected from Pepsi
Authors of this Snacks own: bitcoin and shares of Ford, Twitter, and Uber
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