This drama is even better! US Republican rep. meddles in Musk's acquisition case, asking Twitter to "keep good evidence"

The "buyout tug-of-war" between Musk and social media giant Twitter has introduced new external forces: Republicans in the US Congress want to intervene in the acquisition case, requiring Twitter to keep all kinds of communications, documents and information between Twitter and Musk for future investigation.

On Friday, April 22, 18 Republicans on the House Judiciary Committee sent a joint letter to Tweet Board Chairman Bret Taylor asking the company to keep all records and materials related to Musk's acquisition proposal, "including all electronic messages sent using official and personal accounts or devices, as well as records created using text messages, phone-based messaging apps, or encryption software." ”

The letter said it was a formal request from Congress to keep relevant records and required companies to prevent intentional or unintentional destruction or alteration of all documents, communications and other information, including electronic information and metadata, in response to a potential Congressional investigation.

In addition to the information Musk sent to Twitter, the records that need to be kept include Twitter's consideration and response to Musk's acquisition proposal, as well as the company's assessment of the interests of its shareholders on the basis of the acquisition.

The letter also mentioned that the reaction of Twitter's board to Musk's acquisition proposal, as well as outside opposition to Musk's future role in Twitter, are "worrying."

The analysis pointed out that US Republicans have been accusing Twitter of using "anti-conservative" bias to censor platform user content. Today's joint letter suggests that if Republicans regain control of the Majority vote in the House after the November congressional midterm elections, they may open an investigation into Twitter's firm refusal to be acquired by Musk and subpoena the board of directors to consider the record of the acquisition within. Musk's advocacy of reduced content censorship after the acquisition of Twitter has won the hearts of Republicans, who themselves are wary of big tech companies.

According to sources yesterday, Twitter's board is preparing to reject Musk's acquisition proposal on the grounds of "too low bid" before April 28, as the company plans to release the first quarter of this year's earnings on April 28.

Musk, for his part, was not discouraged, updating its regulatory filings with the SEC this week to provide details of the acquisition.

For example, he said Thursday that he had secured $46.5 billion in financing commitments to acquire Twitter, with 2/3 of that coming from his personal assets and the rest coming from bank loans secured by Twitter assets. Reuters said it was the largest acquisition financing ever proposed by an individual and, in contrast to the traditional acquisition financing design, which tends to be mostly financed by debt collateralized by the assets of the target company.

On Wednesday he said he had created three separate holding companies, called X Holdings I, II and III, all of which were formed "directly or indirectly" to acquire or merge with Twitter, documents that dubbed the program "Project X." Of course, there is no shortage of analytical speculation, which lays the foundation for Musk to integrate electric car giant Tesla, space exploration technology company SpaceX, tunneling company The Boring Company and Neuralin technology and brain-computer interface technology company Neuralink into a parent company.

Others said that the reason why the market thinks musk's proposal to buy Twitter is "not too serious" is because he wants to use a lot of personal assets to acquire, and wants Twitter to get rid of the "cash cow" advertising business on which it depends, these visions are always "silly".

Of the $33.5 billion in private assets Musk plans to use, $21 billion will be in cash, people familiar with the matter said twitter board plans to ask Musk for more details on the source of that cash. Another $12.5 billion comes from a high-risk margin loan obtained by staking Tesla stock to banks, but musk will have to repay the loan if Tesla shares fall 40 percent.

Reuters believes that to double Musk's $33.5 billion own assets, the value of Twitter must rise by 1.4 times, and if he only uses his own assets to fill 1/3 of the transaction consideration, the value of Twitter will only need to rise by 0.7 times, and the investment will double. Bloomberg also said that the deal structure designed by Musk brings $1 billion a year in debt repayment costs, which is a huge amount of money for Twitter, which also lost money last year.

Musk, meanwhile, said he "didn't care at all about the economics of the deal", but felt that it was "extremely important to the future of civilization", a remark that discouraged possible funding providers.

Banks may fear that taking on more risks will draw blame from financial regulators, while also arguing that Twitter is not generating enough cash flow to justify Musk's $43 billion valuation. Private equity firms that are desperately looking for returns on investment are therefore reluctant to join forces with Musk.

On Thursday, some media quoted people familiar with the matter as saying that Thomas Bravo LP, a private equity firm with more than $100 billion in assets under management at the end of last year, has told Twitter that it does intend to make an acquisition offer, but will not join Musk's acquisition plan, but launch a separate one. SoftBank, one of the world's largest tech investors, has decided not to participate in the takeover of Twitter, though a company spokesperson declined to comment.

This shows that Musk, the "Iron Man of Silicon Valley", as a deep user of Twitter, can still have great uncertainty about whether he can acquire this social media giant that is deeply involved in public opinion and political vortex as he wishes. But the entry of Republicans in the US Congress also means that the follow-up development of this acquisition tug-of-war will still be wonderful.

Twitter opened high on Friday, up as high as 5.6% intraday, up three days in a row, close to recovering all the losses since April 18, but the stock price traded at $48, and there is still a big gap from Musk's 18% premium acquisition proposal ($54.20 per share), which means that the market still does not fully believe that Musk can successfully acquire Twitter.