Twitter shares fall on fears US authorities will look into Elon Musk’s bid for the company

Biden administration officials are discussing whether the US should subject some of Elon Musk’s ventures to national security reviews, including the deal for Twitter and SpaceX’s Starlink satellite network, according to people familiar with the matter.

Twitter shares fell 5.1 percent when the market opened in New York yesterday.

US officials are uncomfortable with Mr Musk’s latest threat to stop supplying the Starlink satellite service to Ukraine – he said it has cost him $80 million so far – and his increasingly pro-Russia stance following a series by tweets outlining peace proposals in favor of President Vladimir Putin. They are also concerned about his plans to buy Twitter with a group of foreign investors.

The talks are still at an early stage, people said said on condition of anonymity. US government and intelligence officials are weighing what tools, if any, are available that would allow the federal government to scrutinize Mr Musk’s operations.

One possibility is through the law that governs the Committee on Foreign Investments in the United States to screen Mr Musk’s businesses and operations for national security risks, they said.

The interagency body known as CFIUS, overseen by the Treasury Department, reviews acquisitions of US companies by foreign buyers. It’s not clear whether a CFIUS review — which would include assessments by the State Department, Department of Defense and Department of Homeland Security, among others — would provide a legal avenue for the government to conduct a review, the people said.

Twitter is also facing reports that Mr Musk intends to eviscerate his workforce as part of his acquisition. The Washington Post reports that Mr. Musk’s plan for Twitter includes 75 percent reduction in staff within a few months. Bloomberg News confirmed that potential investors have been briefed on the cut plan, along with an attempt to double earnings over three years.

One element of the $44 billion Twitter deal that could trigger a CFIUS review is the presence of foreign investors in Mr Musk’s consortium. The group includes Prince Alwaleed bin Talal of Saudi Arabia, Binance Holdings, a Chinese-founded and operated digital asset exchange, and the sovereign wealth fund of Qatar.

The panel works behind closed doors and rarely confirms when it conducts reviews. CFIUS also has the power to review deals that have already been made.

https://www.independent.ie/business/world/twitter-shares-fall-amid-fears-us-authorities-will-review-elon-musks-bid-for-the-firm-42086414.html Twitter shares fall on fears US authorities will look into Elon Musk’s bid for the company

Fry Electronics Team

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