How Elon Musk conquered Twitter

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Elon Musk has become in Twitter’s new owner on Mondayfollowing the completion of a staggering $44 billion takeover of the social media platform, ending a process that has fluctuated between a completed deal and dead in the water for the past three weeks.

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“Free speech is the foundation of a functioning democracy, and Twitter is the digital plaza where issues vital to the future of humanity are discussed,” Musk said in his speech. Press release announcing the news. Twitter independent chairman Bret Taylor called the deal “the best way forward” for the company’s shareholders.

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The result ended long-running speculation about Musk’s financial interest on Twitter. April 4 entrepreneur 9.2% shares in the company – or 73.5 million shares worth about $2.4 billion – were disclosed to the public. At the time, the purchase of Twitter shares was accompanied by an offer to join the board of directors, although on April 10, Musk refused to take his seat.

He soon made it clear that he wanted all of this.. April 14 Musk offered to buy the remaining percentage of the company at $54.20 a share, a 38 percent premium to the price he paid for his original investment. Musk’s cover letter to Twitter’s chairman was scathingly critical of the platform. “I believe in [Twitter’s] has the potential to become a platform for freedom of speech worldwide, and I believe that freedom of speech is a public imperative for a functioning democracy,” he wrote. However, he added: “Now I understand that the company will neither prosper nor serve this public imperative in its current form.”

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Instead, he wanted to take the company private, offering $44 billion for it as a “best and final” offer. At the time, analysts were divided on the likelihood of Musk’s proposal being successful and whether it was profitable; while it was in the middle of the usual 30-40 percent markup on the trading price, the share price reached that level only last year. The Twitter board, for its part, said it would consider the proposal.

“He’s setting a sort of precedent for activists who will go after the company,” says Timothy Galpin, senior lecturer in strategy and innovation at Oxford University’s Saeed School of Business. “It’s been done a little before by Carl Icahn and a few others, but it’s not so common as to be haunted by the whole company.”

On the same day that he applied to take over all of Twitter and make it private, Musk appeared on TED talk in Vancouverwhere he outlined his vision. “This is not a way to make money,” he said. “My strong gut feeling is that having a public platform that is as trusted and broadly inclusive is extremely important.” It gave some on twitterand those who own large shares of the platform pause.

Modern reports indicated Twitter will fight to fight back against Muskwhile the CEO of Tesla and Space X got into fight on twitter on freedom of the press with Saudi Arabia-based Kingdom Holding Company, a major shareholder, which said it would reject Musk’s offer. (Saudi Arabia was accused of killing journalist Jamal Khashoggi.)

Such social media battles may be unusual when it comes to takeovers of big businesses, but Musk himself is unusual, says Carey Cooper, professor of business at the Manchester Business School. “He is not a traditional businessman,” he says. “He is a very creative and resourceful person. He is a unique guy and does things in a way that a normal businessman wouldn’t do. He doesn’t play the usual games that an entrepreneur would play.”

April 15 Twitter board activated emergency financial instrument: poisonous pill. The poison pill, also known as the limited-time shareholder rights plan, suggested that shareholders increase their investment in Twitter to reduce Musk’s ability to turn his stake into a controlling stake. Any attempt to get more than 15 percent would require Musk to negotiate with Twitter’s board.

The use of a poison pill prevented a quick hostile takeover, but Musk’s offer never left us. April 21 Musk outlined how he found the $44 billion in cash needed to complete his bid. Morgan Stanley and other firms have offered to support Musk’s proposal while he pays about $21 billion from his own funds. fortune is estimated at 263 billion dollars. The filing added meat to what was previously a speculative proposal and showed just how serious Musk was about taking Twitter down.

Confirmed Funding reportedly called some of Twitter’s shareholders, who were more indifferent to Musk, asked the company to listen to him. Meetings reportedly happened over the weekend, and Twitter’s board met on April 25 to recommend the deal to shareholders. It was a quick and unexpected turn. “There was so much skepticism and cynicism on Friday, and now it almost looks like a done deal,” says Vasant Dhar, a professor of information systems at NYU Stern. Musk’s quick action left other potential bidders playing catch-up. But the deal appears to have stood the test of money, at least for Twitter’s board of directors, as “the board’s fiduciary responsibility is to maximize shareholder value,” Galpin says. “Obviously there are questions about what he would do with the company if he took control of it. It should do more than just add an edit button.”

The privatization of the company will allow Musk to make the necessary changes much faster without responding to the demands of public markets. “I also want to make Twitter better than ever by adding new features to the product, making algorithms open to increase trust, defeat spam bots, and authenticate all people,” Musk wrote in a press release on Monday.

“I think he played her brilliantly,” says Dhar. “You might have expected the reaction we got: “Musk is a maniac of grandeur and he does this for self-promotion.” But I actually think it’s much more than that.”

It is possible that the purchase will fall under the control of regulatory authorities. While antitrust law is unlikely to be a concern, the Securities and Exchange Commission may still challenge Musk’s disclosures. “You can ask the court to stop the deal on the grounds that he filed the paperwork incorrectly,” Pritchard says. “He didn’t register his initial rate on time and then filed the wrong form because he really had the intention of influencing management all along,” he suggests. However, this will require showing the damage caused by these violations. Shareholders can file private lawsuits, but they will likely be able to get more money from Musk in the deal. And the SEC is unlikely to stop the deal because of the damage it could do to shareholders.

It looks like Elon Musk will almost inevitably take control and ownership of Twitter, changing the face of the platform in the process. For some of Twitter’s millions of users, this is a welcome development that gives them more freedom to say and do what they want. For others, it is a disturbing event with potentially frightening consequences. As for the shareholders and Musk himself, everything looks rosy.

“Shareholders will feel like they won and Musk got what he wanted,” Galpin says. “He got control of the company not at an exorbitant price, but not at a cheap price either. No one really gouged the other, and no one lost.”

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