Elon Musk’s negotiation tactics

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The New York Times reported last night that Musk had been trying to get the price down, but had no luck:

In the weeks before Elon Musk declared that his bid to own Twitter was back on the table, his representatives spoke with the company several times about redoing the deal at a lower price, four people familiar with the discussions said.

Mr. Musk sought a discount of as much as 30 percent, three of the people said, a proposal that would have valued the company at roughly $31 billion. Twitter rebuffed the proposal, said the people, who requested anonymity because the talks were confidential.

In the past week, however, discussions narrowed to a discount of about 10 percent, which would have allowed Mr. Musk to pay about $39.6 billion for Twitter. Those talks ultimately did not move forward. Twitter’s market cap as of Wednesday was $39.2 billion.

Around here I love writing imaginary dialogue for Elon Musk, but this one is kind of boring:

Musk: Okay I tell you what, let’s put all this behind us. I’ll drop my termination and buy you for $38.

Twitter: $54.20.

Musk: $42?

Twitter:  $54.20.

Musk: $49? Come on that’s just 10% off our original deal price, the market has cracked, you still have a ton of risk that I will—

Twitter: $54.20.

Musk: …

Twitter: $54.20.

Musk: $54.20, final offer.

Twitter: Fine.

Musk: So we’re done?

Twitter: We’re done when your check clears.

Good for them! I said yesterday that, given the strength of its legal position, Twitter could not really justify knocking more than a couple of bucks off the deal price. And given that that would require new shareholder approvals, delay closing and introduce new risks (what if he backed out of that deal?), it’s hardly worth it. Just stick to $54.20. Musk seems to have come around.