Elon Musk is a pioneer in manned space travel. He’s also done all these things:

1. MadeAn American penis joke. Congressman.
2. Suggested that concern about a potentially lethal disease, Covid-19, was “dumb.”
3. By initiating a hostile takeover Filing the wrongSEC document which instead stated that he wasn’tStart a hostile takeover
4. MadeThis is a joke about Bill Gates.
5. Suggested a takeover of Coca-Cola to “put the cocaine back in.”
6. ComparableA Canadian prime minister for Hitler.

You Elon! You can be serious one moment, but not the next. He’s guy who likes to have fun—and we should all have more fun, he told us as recently as Wednesday at 9:53 p.m.

But some people seemingly don’t like fun. Or at least not the uncertain, Musk-type fun, and their skepticism about him and whether he’ll seriously finish his $44 billion deal Twitter to be privatizedThe stock is still in his hands. That’s why there remains a persistently large gap between his board-approved offer ($54.20 a share) and Twitter’s current share price ($49.11 at Thursday’s close). “The market sees a possible concern as to his mercurial nature,” says David P. Brown, a University of Wisconsin professor who studies securities markets. “Even if he is doing his due diligence.”

As any M&A concludes, it’s pretty common to see a spread between an offer price and a stock price. The process of closing a deal can be complicated. Sometimes they don’t go through. They usually do. But sometimes, things go wrong.

There’s an easy gauge for investor confidence in a transaction’s successful conclusion: How big is the gap between the offer and stock prices as a deal winds to completion? Deals where the acquirer is well-known and trusted will often have a spread of 2% to 3.3%. “Like when Warren Buffett and Berkshire Hathaway close on something,” says David Stowell, a finance professor at Northwestern University’s Kellogg School of Management.

After closing at about 9%, Thursday saw a spread of as high as 11% between Musk’s stock price and Twitter stock. Investors are saying they think the Musk-Twitter deal is three to four times more uncertain than your average piece of M&A. And given who is doing the A in this case—Musk, that goof—such trepidation may not be wholly unreasonable. Is he really joking about Coke investing? Yes, probably? But the market thrives on clarity, less so on joke-y ambiguity, and once you make it a defining characteristic of yours, the market has trouble weighing what’s going on.)

E

verything still points to Musk being able to successfully conclude the deal—publicly committed bank financing, board approval—and you’ll be hard pressed to find someone on Wall Street or in Silicon Valley with a great deal of conviction to the contrary. The media is another matter, and Musk has spent the week riling up journalists by suggesting he’ll make significant changes to weaken Twitter’s moderation policies; journalists have long called on Twitter to do the opposite.

An extensive Reuters column was published on Wednesday The speculationEverything Musk-Twitter did was a scam. A day later, NYU professor-cum-podcaster Scott Galloway Posted that Musk sees the entire thing like one giant options trade but has no intentions of closing out—that is, actually buying Twitter—with Twitter’s $1 billion breakup fee acting as the premium. (A breakup fee is standard M&A fare; if one side backs out, it pays it. Fees are usually around 3%, and that’s just about what Musk got.) Later Thursday, Dan Primack, the Axios business editor who has spent a long time covering venture capital, private equity and M&A in an industry-bible newsletter, said this:

What could prove the media correct—and stop Musk from getting Twitter? We All this was discussed on Tuesday, but given the continuing overhang on the stock, let’s review.

Musk might simply change his mind and decide he doesn’t want to anymore. (This isn’t something you’d expect from the world’s richest person/a public company CEO, but then as we’ve already established, Musk doesn’t act like a typical anything. He commits Acts of Elon—unpredictable, brow-furrowing actions. They’re impossible to forecast for! They’re Acts of Elon.) Twitter can sue the man if he changes his mind about the Act of Elon. Or, it could wash its hands of him and let him pay the $1 million breakup fee.

Another bidder could step in with a higher offer than Musk’s, though that seems highly unlikely. Twitter almost certainly tried to find a non-Musk acquirer when he first appeared and couldn’t.

Musk could be stopped by regulators. However, this seems highly unlikely. He and the SEC may have their differences. However, the SEC is not in a position to make any decisions. It’s the FTC’s turf. It is not likely that the FTC will see it as monopolistic to allow a car mogul to buy a digital-media business. European officials could prove to be more troublesome. One European Union official The Financial Times that the bloc fully expects Musk and Twitter to abide by its moderation rules, which are more stringent than America’s. (The official’s comments came too quickly after the deal’s announcement to be anything but a warning shot fired in Musk’s general direction.) The Europeans, however, will assess antitrust concerns in the same way as their American counterparts. And, again, Teslas and tweets don’t exist in the same marketplace.

T

Musk could be tripped up by many other factors, but we can argue over which one has the better chance of actually happening. Regardless, they’re both long-shot scenarios.

In one, Musk’s financing falls through. Twitter Inc. did not borrow $13 Billion in leveraged buyouts. Will perilously assume, but the $12.5 billion in margin loans secured by Musk’s Tesla shares. They’re available to him only as long as he posts Tesla stock as collateral.

Tesla stock is volatile lately and overvalued. These two factors are interrelated. We have also seen a drop in Tesla shares. They’ve fallen 13.5% in the last five days, likely the result of investors realizing Musk will need to sell some of his 243 million Tesla shares to pay for an additional third part of Twitter financing.

But let’s assume there’s no bad Tesla-specific news between now and the fall, which is about how long it’ll take to close Musk’s Twitter deal. It is possible that there could be an unexpected macroeconomic event such as a period of high inflation, or a conflict among global superpowers. “Now imagine something like that—that would cause a drastic drop in stocks,” says Brown, the University of Wisconsin professor. A drop in equity prices could cause investors to rush to sell high-risk stocks like Tesla that trades for an incredible 118.6x earnings.

Musk will be in great shape with his margin loans, unless Tesla shares reach around $750. At that point, he might need to either pony up more collateral to keep the full loan—or decide it’s not worth it and walks away. He’d pay the $1 billion breakup fee, but heck, he’d still have many billions more. Maybe that seems easier than renegotiating with your lenders during a financial crisis while you’re running several companies and trying to close on another, which has historically struggled to turn a profit even in prosperous macroeconomic times when it didn’t also have LBO debt piled on it.

A second scenario. Musk presents his offer of tender to shareholders. They reject it. Now, Musk has almost certainly gone through a roll of Twitter’s institutional shareholders—the ones with the biggest stakes and the most votes—and decided he’s won over enough to triumph in the vote. But sure there’s a very slight chance that maybe the media drumbeat about Twitter and Musk’s proposed changes grow loud enough, spooking shareholders, who then turn down Musk.

We haven’t talked at all about a different series of events in which Musk gets to buy Twitter in 2022, but then some swirl of all these things—a financial downturn, margin calls, Tesla underperformance, the general headache of running Twitter as its needs to cut costs and add new revenue streams—leads to another Act of Elon. He then sells the Twitter he has reduced to someone who is interested. Town square functionMaybe he turns a smaller Twitter site into a nonprofit that is managed by him. Cofounder Jack Dorsey has voiced confidence in Musk, and in the same breath said he think the $5.1 billion (sales) business he ran twice shouldn’t be a for-profit business.

If you go back and count the “ifs,” “maybes” and “buts” in the preceding paragraphs, you get a sense that, yeah, Musk is still pretty likely to walk away with Twitter. Nonetheless, you’ll have a better idea why investors are treating this deal extra cautiously, three to four times more cautiously than they otherwise might. At some later point, we can regroup and decide whether Musk’s Twitter purchase belongs on the “great things” list or on the one with less noble things, next to the pretend takeover and the penis jokes.