Elon Musk is likely to end up not buying Twitter

Four years ago, Elon Musk promised to create a peanut candy company to take on Warren Buffett’s iconic See’s Candies. He then changed his mind. It would not be surprising if Twitter followed the same path.

Okay, the Tesla boss has clearly been serious so far. The deal includes a $1 billion cancellation fee for both parties. And the network’s lawyers included a “specific performance” clause, which could theoretically force you to buy, though in practice it could probably be resolved by increasing damages.

There are good reasons for him to chicken out. The oldest is Tesla. It has fallen a fifth on the stock market since he revealed his involvement on Twitter, in part because it could sell shares to finance his venture. If Tesla recovers — which is likely if the Twitter deal falls through — the $40 billion recovered would more than offset the cancellation fee.

China is also a major sticking point. Twitter is no friend of Beijing. China could easily hold Tesla hostage if the network, under the ownership of Musk, did not agree to cooperate. It’s uncomfortable for a self-proclaimed “free speech absolutist.”

In reality, that absolutism probably won’t survive a Twitter deal in any case. The EU has said it must police illegal or harmful content or risk banning. In the US, where regulators are less aggressive, other technology companies could actually wield the same threat. See Apple, which decides which apps appear in its influential store.

One thing makes it easy for Musk to walk away before all this becomes a problem: the market already anticipates it in part. Twitter is trading 10% below the offer, a fairly wide margin for a deal with little antitrust opposition. Musk’s tweets criticizing some of the firm’s actions — potentially bypassing the deal — already suggest he may be starting to lose interest. Most likely, your attention will shift elsewhere. It would not be the first time.