The twelfth episode of Technext’s podcast series Tech Bytes featured a discussion with Dr Gbenga Odegbami, CEO and Co-Founder, of Youverify, to discuss the impasse between Twitter and Elon Musk amidst Elon Musk’s standoff stance.
As usual, this episode of Tech Bytes featured a review of major news items in the tech space around Africa and the globe, conversations and events in the world of tech during the past week. These include:
- Egypt’s Swvl has expanded into Mexico with the acquisition of Mexico’s Urbvan
- Wave lays off of 15% of its staff
- FSB is thinking of a financial regulation for crypto
- South African firm H2O securities launches world’s first crypto water token
You can listen to the full episode of this week’s Tech Bytes below:
Twitter vs Elon Musk- Dr Gbenga shares insight
The conversation focused on the going legal battle between Musk and Twitter, since the former’s decision to stand off the acquisition deal. Elon Musk has reportedly been sued by Twitter’s lawyers after breaking the clause on the purchase agreement.
What began as a probe into the percentage of bot accounts on Twitter’s network has developed into a legal dispute between the tech tycoon and the social media giant, with a deal at stake.
Gbenga believes the initial bid was an impulsive decision by Musk devoid of the usual due diligence required for such purchase. He believes the actual motivation is probably his desire to sell some of his Tesla stocks.
Asked if it was a criminal offence to sell shares of a company to fund a purchase of another company, Gbenga explained that it wasn’t a criminal act or offence. He said Elon Musk would have sent off a wrong signal to investors and the market if he had sold off Tesla shares without tying it with another big project.
It’s not a crime. If you are a critical stakeholder like a CEO or founder and you are selling shares, it’s sending signal that your investment will do better somewhere else, so it might cause a bandwagon effect for a company’s investors to sell their shares too.”Dr. Gbenga Odegbami
However, he believes that Elon Musk will still benefit from the outcome of any legal dispute since Twitter as a company would suffer enormous harm, which would force it to take all reasonable measures to make Musk reach a quick settlement.
Gbenga does not anticipate Musk losing the case. But, he believes that the social media giant might ultimately profit if Musk loses the case.
Related also: Tech Bytes Podcast #10: To buy the dip or not?
He also gave an insight into how the valuation and acquisition of major companies actually work. Buyers normally strike a deal based on their perception of how much they think a company is worth in value and then make their bid. The seller then considers the deal, and if they think that’s what the company is worth, then they accept.
What Elon Musk did was to give them an offer and the shareholders saw that the deal was good enough considering the market price of Twitter’s shares at that time, although the dynamics might be different for different companies.
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