While the chattering classes are obsessing over Elon Musk’s love life (I still can’t figure out if he did or didn’t have that alleged affair or why I should care), the Tesla electric-vehicle king has been busy developing a new and risky strategy to buy Twitter — but at a significantly lower price, bankers with knowledge of the matter tell The Post.

I know it’s conventional wisdom that he wants to back out of the deal; Twitter, he says, is hiding the football on the number of fake accounts and those annoying bots. But as we’ve reported before, bankers who know him are dubious that he really wants to call it quits.

They say he just wants to pay less after Twitter’s stock price cratered with the rest of the tech sector along with Tesla, which serves as Musk’s deal currency (he owns 175 million shares; you do the math).

Now they say there’s more method to Musk’s Twitter-deal madness, even if he’s still rolling the dice in ways that could end up disastrous for him.

The game plan the bankers say Musk is employing is a war of attrition — playing a long game and wearing the enemy down until they capitulate. You essentially kill more of them than they can replace on the battlefield until they surrender.

Musk’s war with Twitter ­involves a battlefield known as the Delaware Chancery Court, the go-to venue to settle corporate disputes. A trial is set to begin Oct. 17 over Twitter’s lawsuit to compel Musk to make good on his $44 billion initial offer to buy the company.

They will battle it out in Delaware's Court of Chancery.
Musk and Twitter are set to go to court on Oct. 17, 2022.
AFP via Getty Images

These bankers say Musk knows the Chancery judges don’t look kindly on rich business types who sign documents saying one thing but then try to change terms when their —financial circumstances suddenly change.

Musk, you may recall, signed away due diligence when he began snapping up shares of Twitter and then made his “best and final offer” to buy the company.

He couldn’t have been surprised by the fakes, in my humble opinion, because he knew there were issues. In fact, he said he had plans to get rid of them and turn the ubiquitous social-media site into something like a successful business. (For all its influence, Twitter barely makes any money.)

The Chancery judges have seen all sorts of BS’ers over the years, and they’re likely to throw Musk and his excuses in the same ­category.

A court order could force him to pay the entire $44 billion ($54.20 a share as opposed to Twitter’s current share price of $41.61), which even for someone as rich ($260 billion) as Musk is a pretty big chunk of change.

The court is known to favor those that the judges are acquainted to.
Musk will face Twitter in the Delaware Court of Chancery.
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The bankers say Musk is prepared for that. He’s also prepared to appeal to the Delaware Supreme Court — and that’s where his war of attrition begins. He figures the appeal will take around eight months or maybe a year, but with the overhang of uncertainty, Twitter’s business will continue to crater. Advertisers are already bolting amid Musk’s comments about the bot issues and the looming recession.

Money will be tight, and there are just so many rounds of layoffs any high-tech company can execute to make the numbers work before they start eating into their infrastructure.
Musk believes Twitter will be pressured by shareholders to ­capitulate to a significantly lower price as shares slide into the $30s and below, these people say. An attorney for Musk declined to comment.

Will this work? Charles Elson, the founding director of the Weinberg Center for Corporate Governance at the University of Delaware and a Chancery Court expert, thinks so.
The “appeals process could take months — possibly six to eight, so it would make sense Musk might take advantage of that time in limbo to negotiate a better deal,” he told Fox Business’s Eleanor Terrett.

His prediction: Musk shaves about 5% off the price and Twitter agrees to a new deal. Or maybe Twitter wins on appeal, forcing Musk to cough up the full $44 billion. As Tesla’s stock continues to fall amid recession fears, Musk would be owning two declining assets.

Memo to Elon: Wars of attrition are risky.

Pelosis take a lo$$

Looks like Paul Pelosi finally lost money indulging in his fav­orite pastime: trading stocks. Maybe that’s why his wife, Nancy, the powerful speaker of the House of Representatives, finally supports new legislation that would ban lawmakers and their spouses from trading stocks using their obvious information edge.

Paul and Nancy Pelosi's stock portfolio continues to grow.
Paul Pelosi finally took a loss on a tech trade.
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As we reported in last week’s column, Big Paul has been killing it in the markets in recent years with fishy trades that seemed timed to benefit from legislation with his wife’s obvious involvement. He’s amassed quite a fortune for him and Nancy based on his investment skills. They are worth more than $100 million, and the House speaker is one of the wealthiest people in Congress.

Last week, Paul finally took a loss on a tech trade for reasons that made no financial sense since shares of the stock will likely keep rising with the new legislation — being pushed by his wife, of course — giving chipmakers billions of dollars in corporate welfare.

Given all the bad publicity surrounding his trade, Paul might have been shamed into selling at a loss. Likewise, Nancy might have been shamed into supporting a bill that would end this ethically fraught gravy train they feasted on for years.



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