Hope springs eternal for Jeff Bezos, but the Washington Amazon-Post’s analysis does hit a couple of points worth watching. The Twitter board’s acceptance of Elon Musk’s bid does not mean that the deal has been completed yet. If circumstances change, such as Musk’s net worth and the value of stock pledged against the leverage necessary to complete the sale, it could still get derailed.

It still seems rather unlikely, but go figure that Musk’s competitor in the aerospace industry would want his mass-communication platform focused on Musk’s downside:

Elon Musk’s $44 billion deal to buy Twitter is moving along at breakneck speed — but before all the boxes are checked and the deal is finalized, there is still a risk it could fall apart. …

Twitter’s stock price fell Wednesday to close at $48.64. That’s well below the purchase price — $54.20 per share — that Musk is set to pay for the company. Analysts said that indicates some investors were spooked the deal could fall through.

Actually, it means that the potential value of the buyout to current investors grew just a little bit. Some people might not want to bet on Musk’s bid surviving too, but the drop was minimal — and the value is still well above Twitter’s price before Musk got serious in his bid:

That’s not much of a retreat when looking at the price in context. Plus, there shouldn’t be any expectations that the stock will rise much above this point. There’s a cost to buying and selling stock, after all, both in commissions and opportunity costs elsewhere. People holding the stock already have lots of incentives to hang onto it, whereas those with significant capital to invest might not be interested in the marginal gain they’ll make by jumping into Twitter now with the buyout price fixed at a few dollars above this price.

A bigger issue may be the price of Tesla stock, on which Musk partly predicated the financing:

Musk said he plans to fund about $21 billion of the deal with his own equity. Part of that will come from his significant stake in electric car company Tesla, where he serves as CEO, as collateral for the deal.

But Tesla’s stock dropped off steeply in price the day after Musk’s deal to acquire Twitter was announced. The drop carved $100 billion from the stock, in turn leading to a hit to Musk’s fortune. And it could jeopardize the financing for the deal if it drops too low.

True, but most of that hit took place this week as Musk sold off his Tesla stock to help with the Twitter deal. Investors would have anticipated that action, as would Morgan Stanley when structuring the financing for the Twitter buyout. Musk’s SEC filings disclosed that he sold off $8.4 billion in Tesla this week:

Elon Musk sold roughly $8.4 billion worth of Tesla shares this week, following his bid to take Twitter private, according to filings with the Securities and Exchange Commission.

The Tesla and SpaceX CEO offloaded about 4.4 million shares of his electric vehicle company in trades on Tuesday and Wednesday. New filings on Friday showed sales of an additional 5.2 million shares on Thursday.

That puts a lot of cash in Musk’s pocket, plus it does so on the relative cheap. Those shares got sold at the retail price, so to speak, somewhere north of $900 per share. But don’t forget that Musk can soon purchase almost twice as many shares back from Tesla at around $70 a share, thanks to a massive option in his compensation package. Financial Times reported that when Musk made his tender offer:

The margin loan to fund a Twitter bid requires a pledge of nearly 59m Tesla shares, or about 85 per cent of Musk’s total stake. His remaining unpledged stock is worth about $25bn at current prices so if sold, and allowing for an overhang discount, there would be just enough to cover the cash component of the offer. It’s a big ask.

But such calculations ignore a big event looming in the Muskonomy: the final payout from Tesla’s 2018 bonus scheme. Musk’s last awards will unlock shortly, assuming board approval, and will carry a five-year selling lockup.

Each of the three tranches due Musk give him the right to buy 8.4m Tesla shares at $70, a more than 99 per cent discount to the prevailing market level. So, based on a $1,061 share price at pixel time, Musk could buy Tesla stock worth $25.4bn for about $588m. Factor in those shares and the margin loan financing looks a bit less onerous.

That will only cost Musk about $500 million and some change out of the $8.4 billion in cash he just realized through those stock sales. It also makes the valuation of the stock less of an issue, too. Musk has a lot of leeway here. Plus, as Musk said last night, he’s finished the selloff:

No further TSLA sales planned after today

— Elon Musk (@elonmusk) April 29, 2022

So how has the market reacted to that announcement? Predictably:

In other words, while a collapse of Tesla stock is possible, it doesn’t look at all likely.

The other possibilities raised by the WaMazonPo are even less likely. Musk doesn’t appear to be changing his mind, based on his market moves this week to put the cash together for the buyout. The relatively low $1B termination fee isn’t incentivizing a reversal either. The SEC may still ding Musk up to $156 million for the way he bought the initial 9.2% interest in Twitter, but they won’t have much regulatory involvement in a straight-out private sale approved by a corporate board.

More interestingly, the WaMazonPo once again never mentions in its analysis the clear conflict of interest in its coverage of Musk. Washington Post’s uber-billionaire owner Jeff Bezos competes directly against Musk in the aerospace industry; Rachel Lehrman mentions Musk’s ownership of SpaceX but never discloses that Bezos founded and funds Blue Origin. Both companies compete for contracts with NASA. In fact, Bezos and Blue Origin lost to SpaceX on NASA’s Artemis moon lander, a bid decision which Bezos’ Blue Origin unsuccessfully protested to the GAO last summer.

The possibility of Musk’s Twitter bid collapsing looks remote. The collapse of the WaMazonPo’s credibility is already demonstrable.