On Thursday, April 14, Elon Musk announced an offer to buy Twitter for $54.20 a share.
This is a great story with many fast moving parts. It’s also a story that will probably drag on for the next few months, maybe even longer. So we thought we’d put together a guide for you, our readers, that can be updated as things continue to develop. Because, like elonwe ❤️ you.
So buckle up – it’s going to be a bumpy ride.
The latest news:
The “will buy/won’t buy” saga on Twitter is about to end with a deal to be announced on Monday. Twitter is in the final stretch of negotiations with Musk, reports Bloomberg. Multiple outlets report that Twitter’s board was considering Musk’s funded offer over the weekend, with The New York Times saying that the 11 members of the company were negotiating with Musk as of Monday morning. Twitter is scheduled to report earnings on Thursday, by which time the company is expected to have weighed in on Musk’s bid, reports The Wall Street Journal.
Our Musk resident whisperer Elizabeth Lopatto breaks down the details found in the billionaire’s latest filing with the Securities and Exchange Commission, concluding that they lend much more weight to his proposal. She also explores why it hasn’t been able to attract other investors and whether Twitter will be able to find its own buyer to scare off Musk.
Lastly, she plays with what happens if Musk succeeds, namely a lot of Twitter employees quit and Musk makes a lot of changes, and maybe even reinstates Donald Trump on the platform. Good times!
Republicans are nervous about Twitter’s attempts to thwart Musk’s public offer. CNBC reports that members of the House GOP, led by Rep. Jim Jordan (R-Ohio), are asking the board to preserve all records of the transaction, which could set the stage for a future hearing if the party takes control of the House after half term. elections.
If you’ll recall, Twitter is the favorite punching bag of conservatives who claim, largely without evidence, censorship by the social media company.
The story so far:
A thousand years ago, on April 4, 2022, Elon Musk announced that he had bought 9.1 percent of Twitter. News that the world’s richest man was now (briefly) the largest shareholder in his favorite social media platform sent stock prices soaring and many typing away.
Musk immediately began soliciting suggestions for ways to improve Twitter, what else, by tweeting a poll. The company responded by offering him a board seat, a move that would have restricted him to owning just 15 percent of the company. At first, he said yes. Then he changed his mind and said no. Meanwhile, our resident Twitter and Musk experts, Casey Newton and Liz Lopatto, respectively, delved into why Musk was flirting with Twitter and what the possible outcomes would be.
After turning down a position on Twitter’s board, Musk updated his filing with the Securities and Exchange Commission to indicate that he would not be a passive player in the company’s affairs. Gone is the language that he would restrict his holdings to just 14.0 percent of the company. In hindsight, this was the first hint that he might try something more impactful than simply buying stock to serve as a board member.
platforms Casey Newton isn’t the only one who didn’t think Musk would launch a hostile takeover of Twitter. After news broke that Musk had acquired 9.1 percent of the company’s stock, many people briefly entertained the idea that Musk might try to buy the entire company, only to finally conclude that he had already gotten all of it. what he wanted from Twitter.
Casey was correct in positing that Twitter’s poison pill provisions may not be enough to stop Musk. But he also assumed that Musk would simply continue to troll the company through his tweets, which is certainly still a likely outcome.
Anyone who has been in the market to buy a home knows about “best and final” deals. In his opening salvo, Musk claims that his offer to buy Twitter is exactly that. Whether that bolsters his position or ends up backing him into a corner, it’s too soon to tell. But it is clear that he is offering Twitter shareholders a fairly fair premium: $43 billion for a company with a market capitalization of $37 billion.
Musk says that Twitter must be made private in order to make the changes that need to be made. These include an editing feature, an open source algorithm, less moderation, and a higher bar for removing offensive tweets.
Musk is a very rich guy. So naturally, he would say that he is not interested in buying Twitter to make money. He sees Twitter as the “de facto town square” and wants to open source the social media company’s algorithm. He is trying to frame the entire takeover bid as some kind of crusade to protect free speech.
But even a free speech maximalist like Musk needs to convince shareholders that his takeover offer is in their own financial interest. Otherwise, what are we really doing here?
Musk is a prolific Twitter user. He’s a troll too, and Liz Lopatto explains exactly what he needs to do to make people take him more seriously. Musk has a tendency to shoot from the hip, but several corporate governance experts told us they doubt he really thought of all this.
It hasn’t lined up the funding to buy Twitter and take it private. He is working with Morgan Stanley, but no one knows if he is really listening to them. Musk himself said that he may not win in the end. If he manages to pressure Twitter into making the changes he wants, he may simply withdraw his offer. Everything is possible.
Behind the scenes, Twitter board members are plotting their response to the world’s richest man takeover scheme. There’s the poison pill, as well as earlier provisions in the company’s bylaws, that could make it extremely difficult for Musk to take over.
Everyone’s first meeting on Twitter after Musk’s offer went public was a strange one. After serenading employees with Backstreet Boys and Aretha Franklin, the company said it would continue to evaluate the offer.
Employees told Alex Heath they were frustrated by the lack of a more detailed response. He is concerned about the future of the social media platform, as well as the possibility of layoffs.
Hours after announcing his offer to buy Twitter, Musk was on stage in Vancouver for a timely interview with TED Talk founder Chris Anderson. During the conversation, Musk discussed his “obsession with truth” and echoed comments he made in his SEC filing about his desire to protect free speech and democracy.
But as Adi Robertson points out, his understanding of free speech appears to be nebulous at best. After examining Musk’s comments, as well as previous efforts by Twitter leaders to deal with speech laws around the world, he concludes that Musk may be in for a rude awakening if he succeeds in buying the social media platform.
Can’t underestimate what a rollercoaster it has been so far. He buys shares! He will join the board! No wait, he’s not joining the board! He could buy more shares! No wait, he wants to buy. the whole megillah! This thing has more twists than a Shyamalan movie. And we’re not even halfway there.
The day after Musk announced his proposal to buy Twitter, the company’s board responded with a poison pill. This is basically the board’s way of saying, “Thanks, but no thanks.”
The poison pill is a new “shareholder rights plan” to give certain shareholders the right to buy more shares if Musk or another buyer tries to take control. And he notes that Twitter’s board intends to fight Musk’s offer to take sole ownership of the company.
In a new filing with the Securities and Exchange Commission, Musk laid out his plan for the $46.5 billion in loans that will allow him to finance the purchase offer made on April 14. The financing will be provided through two debt commitment letters from Morgan Stanley Senior Funding, in which the bank promises a series of loans worth $25.5 billion. The remaining $21 billion will be covered by Musk himself.
Notably, the filing does not list any equity partners to share the cash load with Musk. The Tesla CEO already owns a 9 percent stake in Twitter, valued at roughly $2.9 billion.