Elon Musk's plan to acquire Twitter is in "serious jeopardy," sources close to the deal told The Washington Post. The report came after Musk hinted that he was considering walking out of the deal over concerns about the number of fake accounts and bots on the platform. Dan Ives, managing director and senior equity research analyst at Wedbush Securities, joined Cheddar News to break down his thoughts on the latest news. “I ultimately really think this is heading down a path that the chances of a Twitter deal are becoming less and less likely, especially as we go into the second half of July," he said.

Closing Bell

Musk's Twitter Deal Faces More Headwinds Over Spam Bots

Welcome back to closing bell on cheddar news. Let's get to a story. We've been following very closely here on cheddar news as the Washington post is reporting that the Elon musk proposed $44 billion deal to buy twitter is in very serious jeopardy. It comes as people in the Tesla ceo scamp continue to claim twitter's figures on spam and fake accounts on the platform are inaccurate. Another issue is twitter's share price, which has fallen dramatically since his takeover bid in april. Now, if musk pulls out of the steel, it could lead to a major legal battle joining us now to break all of this down in front of the show dan Ives, managing director of equity research at Wedbush Securities, dan, welcome back. We always love talking to you. It seems like we're going in circles here, your thoughts and what's going to happen next. Look, I think this was really a game of high stakes poker and ultimately must either walks and the fights twitter board in court and I think it's probably a 35% chance of that happening or its renegotiation 42 to 45 potentially in terms of where this could go. And that's why I look at the big issue here here If musk is not involved, Twitter's is up $30 stock. The stock's telling you that 5420 is out the window. So you believe that Twitter shareholders will vote for the deal to go through as we know musk is the final hurdle here, it's, does it look less and less likely as more time goes on. Look, I mean, there's a better chance of me playing for the Yankees than 54, 20 happened. And I think ultimately right now it's about does the board want to get to the renegotiation table with us, get a lower price? And I think on the fake account body issue and I think that ultimately would drive probably something in the low 40s. Otherwise this becomes really a battle in the court and I think that would be the next step in terms of where this all heads. And I think right now everyone's waiting for the next focus in terms of what could be a formal announcement from the musk and potential of the next week or two, Do you think Twitter's recent price drop factors into Musk's decision here to go through with the $44 billion Musk's net worth has been taking a hit recently, a stock slide. I think it's a different market than when mustard the deal that we could call it. Maybe it's a scapegoat issue called feed, obviously it's been about $150 overhang on Tesla. The big issue, choose the financing, financing a $44 billion $27 billion dollar combat is an issue. And I think right now, you know, this is all, it's coming to some sort of finale in terms of the circus show. But I think this is probably tip of the iceberg of what we're going to see in terms of muskie, they're trying to go stage left, exit the deal or a lower price. And I think twitter's board backs against the wall because they know stand alone, this is stock likely that has a two in front of it without much with Tesla SpaceX, other startups on his plate. Do you really think musk could focus enough time on twitter? Look, this has always been a twilight zone from the beginning and never made any sense. 44 billion never made any sense. And so that's why there's no other bidders. I think it's a, it's a stretching too thin situation at a time that Tessa has never needed much more and that's why it's been overhanging the stock. And I think the fake account body issue is it started to come to surface and I ultimately really think this is heading down a path that the chances of a twitter deal are becoming less and less likely, especially as we go into the second half of july, Do you think Musk would be responsible for that $1 billion dollar breakup fee if he does pull out of the deal? And do you think there's enough evidence that bots are an issue to at least convince a judge? Well, that, that's gonna be the issue is that, you know, twitter's board, they're gonna fight musk in court, not just for the billion, but if he looks to walk for basically the whole deal, this could get caught up in the courts for extended period of time. While twitter is a standalone company with bots take account issues. It would really be a tornado like situation for twitter and that's why right now. I mean, I think behind the scenes, this is either renegotiation or they sharpen the knives and ultimately go into court. How long do you think this is going to continue dan. Oh, I think we'll probably get some short announcement over next week or two from the must camp, especially with potentially some sort of formal vote coming from twitter by the end of the summer. But I don't think this soap operas ending anytime soon and you know, I think you're starting to see from the twitter camp, there's understand more and more that this is not going to be a Cinderella story. Danna is managing Director of Equity Research at Wedbush Securities. We always appreciate your time and information. Have a great weekend then. Thank you