How Elon Take Over Twitter
Hello, friends! The world's richest man, Elon Musk, recently purchased one of the most famous social media platforms, Twitter, for $44 billion. Musk's first action after the purchase was to fire CEO Parag Agarwal and a large number of Twitter employees. Musk claims that he wants to set Twitter free and allow more freedom of speech on the platform. He wants to create a public platform that is trusted and inclusive. However, it is interesting to note that Twitter actually sued Musk, which led to him acquiring the company. Let's find out more about this story and what the future holds for Twitter.
Elon Musk's Acquisition of Twitter
On January 31, 2022, Musk purchased shares in Twitter, gradually increasing his stake in the company over the next couple of months. However, this information was kept secret from the public. By March 14, Musk's stake had exceeded 5%, which legally required him to disclose it to the public and the Securities and Exchange Commission (SEC). Musk missed the deadline to disclose his stake.
On March 24, Musk criticized Twitter on Twitter, asking his followers about their opinions on freedom of speech and democracy on the platform. Musk was discussing his ideas with Twitter's former CEO, Jack Dorsey, who initially supported Musk's passion for free speech. However, Parag Agarwal had already become the new CEO of Twitter at that time.
On April 3, Musk shared his ideas with Agarwal and the rest of Twitter's board members. He proposed that Twitter either become a private company or he would create a rival social media platform to compete against it. The next day, on April 4, it was revealed that Musk had purchased a 9.2% stake in Twitter, making him the largest shareholder in the company. This announcement caused Twitter's stock price to soar.
Offer to Buy Twitter
On April 14, 2022, Musk surprised everyone by announcing his offer to buy the entire company for $43 billion. Experts believe that Musk wanted full control of Twitter to shape it according to his vision. Taking the company private would allow Musk to have more control and avoid the transparency and scrutiny that public companies face.
Twitter's board members were concerned about the impact of making the company private or facing competition from a rival platform created by Musk. On April 5, they offered Musk a seat on the board, which he accepted. However, just a few days later, on April 9, Musk tweeted, "Is Twitter dying?" and declined the offer to join the board, stating that it was a waste of his time.
Musk clarified on April 11 that he wanted to make Twitter a private company. This move would allow him to shape the platform without the constraints of being a public company. Musk's offer to buy Twitter was accepted by the board on April 25, 2022, for $44 billion. However, there were conditions attached to the deal, including a prohibition on Musk saying anything negative about Twitter or its employees publicly during the processing of the deal. If Musk failed to secure the deal, a $1 billion termination fee would be imposed on him.
Financing the Acquisition
Musk disclosed the sources of funding for buying Twitter on April 20, 2022. The $43 billion would come from various sources, including $7 billion from senior secured bank loans, $6 billion from subordinated debt, $6.25 billion from personal bank loans to Musk, $20 billion in cash equity from Musk in exchange for Tesla stock, and $7.1 billion in equity from 19 independent investors. Twitter's advisors, Goldman Sachs and JP Morgan Chase, both agreed to the deal.
In conclusion, Elon Musk's acquisition of Twitter has caused significant changes within the company. Musk aims to bring more freedom of speech to Twitter and end biases. By making Twitter a private company, Musk can shape it according to his vision. The future of Twitter under Musk's ownership remains to be seen.
Elon Musk had offered to buy Twitter for $44 billion, with a provision that he would have to pay a $1 billion fine if he backed out. Parag Agarwal would receive $39 million and Jack Dorsey would receive $978 million. However, Musk later had second thoughts, claiming that there were reports of a high number of bots on Twitter and that he felt cheated. Musk and Agarwal got into a public feud on Twitter, and Twitter filed a court case against Musk for breaching the contract. Musk filed a counter case claiming that Twitter misled investors about the number of spam and bot accounts. A whistleblower report by Peiter "Mudge" Zatko added to Musk's reasons for backing out, and Musk sent multiple termination letters. Eventually, Musk agreed to continue with the deal, but Twitter employees expressed concerns about potential layoffs.
