The deal came after a quick meeting of Twitter's board of directors to discuss the latest
As of Monday morning Twitterwas valued at $37 billion, which makes Musk's offer of $54.2 per share particularly impressive. It's worth considering that Musk sent his proposal by saying that if it was rejected, it would "prompt him to reconsider his position as a shareholder." He cited a possible loss of “confidence in management.”
How did it all start?
At the beginning of April it became known that Elon Muskbought shares of Twitter. An announcement about this appeared on the website of the US Securities Commission (SEC). The day before, the businessman acquired a 9.2% stake in Twitter and became the largest holder of the company's securities. The transaction cost was about $3 billion.
After disclosing information about the acquisition itselfmajor Twitter stock Musk was offered a seat on the firm's board of directors, but he later declined the position. The fact is that this imposed certain restrictions - he could not own more than 14.9% of the company's shares. Now, after the completion of the transaction, Musk will, in fact, become the sole owner of the social network.
Musk's plans on Twitter
It seems that open moderation is important for a businessmanon the platform, innovation and optimization. "Free speech is the foundation of a functioning democracy, and Twitter is the city's digital plaza where issues vital to the future of humanity are discussed," the Tesla and SpaceX founder said in a statement included in the release. “I want to make Twitter better than ever by expanding the product with new features, making algorithms open to increase trust, defeating spambots, and authenticating all people.”
Musk also reiterated his belief thatTwitter has "tremendous potential" and added that it will work with the firm and all Twitter users to "unlock it." The decision to sell Twitter was made unanimously by the company's board of directors and is expected to be completed in 2022. As a result, Twitter will become a private company. The social network’s audience now amounts to 206 million people worldwide (based on the results of 2021).
Where did Elon Musk get the funds for the purchase?
As Musk noted in an SEC filing last yearFriday, he borrowed $25 billion of funds from several major banks, and the businessman took another $22 billion from his own capital. Analysts suspect that these loans could increase the cost of servicing Twitter by $1 billion, which is approximately 20% per annum company income.
What will change in the social network?
The first obvious change in the social network is the buttonediting a post on Twitter. Elon Musk mentioned it when he announced his stake in the company’s shares. It is noteworthy that this feature was already in development. Musk also said he would cut Twitter Blue advertising, lower subscription costs and even allow Dogecoin payments.
It is also known that Elon Musk is an activea Twitter user and has often criticized the social network's moderation policies, declaring himself a "free speech absolutist". As a result, there are suspicions that the businessman will initiate changes in content moderation standards in the coming weeks and months.
Employee reaction
In response to the news of the sale of Twitter, CEOCEO Parag Agrawal praised the deal: “Twitter has a purpose and relevance that impacts the world,” he said in the release. “I'm proud of our teams and inspired by the work that has never been more important.” He previously replaced company co-founder Jack Dorsey as the company's CEO.
However, just a week ago, Axios wrote that "the chaos surrounding Elon Musk's hostile takeover bid is starting to take its toll on Twitter employees."
According to multiple sources on Twitter, ahead of Musk's takeover offer, employees "were on edge, but not panicking."When Musk got a seat on the board of directors, "it definitely made them feel better" as it "prevented a takeover."As a result , most of the employees learned about the prospect of selling the company from news reports.
On the Monday following the deal, Twitter's CEO sent out a letter to employees:
Team, the board of Twitter announced thatentered into an agreement to acquire Twitter by a private entity wholly owned and controlled by Elon Musk. I know this is a significant change and you probably understand what this means for you and the future of Twitter. I will bring the company together at 2 pm PT to speak directly with you and answer your questions. I also invited our Chairman Bret Taylor to join us. See you. Always #OneTeam. parag
Letter from Parag Agrawal, CEO of Twitter
It is not yet known what this meeting will lead to.The official reason for the sale of Twitter was not disclosed, but a report by the New York Times said that the social network's employees are "in conflict" about the upcoming sale.
Where it leads?
"It's very important that people have a real opportunity to speak freely within the law," Musk said during Chris Anderson's interview at TED 2022, according to The Verge."I think the risk of a crisis of civilization decreases with the increased credibility of Twitter as a public platform."Such a statement by the businessman hints at Musk's future plans.
After the U.S. presidential election, when one of the candidates, incumbent President Donald Trump, was permanently banned from Twitter, this social network became one of the most discussed in the context of the political situation in the world.In addition, new elections begin in two years, and now the situation in the world is not the simplest.Perhaps all this affects Musk's plans for the purchase and possible change of the social network's moderation policy.However, in the end, the businessman can stop at the user interface settings, the implementation of the cherished "edit" button, and the implementation of Dogecoin.It's impossible to say for sure right now .
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