image source,Getty Images
Elon Musk and Twitter’s board have reached an agreement on a planned $44bn (£34.5bn) takeover.
The acquisition, which was announced by Musk less than a month ago, seemed hopeless only a week ago, but it turned around in just a few days and the two sides finally reached an agreement.
Why change your mind?
At first, when Musk announced his bid to acquire Twitter, Twitter initially refused, and even used a “poison pill” to prevent Musk’s acquisition.
The so-called “poison pill”, also known as “shareholder equity plan”, refers to a way for the target company to resist a hostile takeover. A large stake in the company, thereby driving up costs for the acquirer.
But Musk later submitted to Twitter what the acquisition funding would consist of, including his own assets and financial backing from Wall Street tycoon Morgan Stanley.
With funding details and solid financial backing in place, the two sides finally met to discuss the deal, and discussions on the acquisition agreement accelerated over the weekend.
image source,Reuters
Twitter’s board initially opposed Musk’s takeover plan
Why did Musk buy Twitter?
“Free speech is the cornerstone of a functioning democracy, and Twitter is a digital square of speech where matters of vital importance to the future of humanity can be debated,” Musk said in a statement announcing the deal.
In explaining the acquisition to Twitter’s board, he said that Twitter is “a platform for free speech around the world” but that Twitter in its current form cannot fulfill this “social responsibility” and “needs to be transformed into a private company.”
Musk has said that his main interest in Twitter is to overhaul Twitter’s content management policies and to make Twitter a platform for free speech.
Musk himself is an active user of Twitter, with a total of more than 83.3 million followers on Twitter, and has many opinions on Twitter’s use of features.
He recently tweeted asking 83.3 million Twitter followers whether Twitter should allow users to edit tweets, and 74% of respondents agreed.
How might Twitter change after the acquisition?
Musk’s acquisition of Twitter, with a promise to reduce content moderation and increase free speech, has raised many questions about how Twitter will change in the future.
Human rights groups have expressed concern that reducing content moderation could lead to an increase in hate speech on Twitter, saying it would not like to see Twitter “willfully turn a blind eye to violent, abusive speech, especially against women, non-binary people, and others who are underserved.” Proportionally Influenced People”.
Many Twitter users are also asking if accounts that were once suspended by Twitter would be allowed back if Twitter changed its management and company policies.
The most well-known person who has been “banned” by Twitter is former President Trump, but he has said that even if Twitter lifts the restrictions on him, he will not return to Twitter, but will continue to use the one he created himself. Social networking platform “Truth Social”.
After Musk’s acquisition, who will manage Twitter?
It’s unclear who would run Twitter if Musk bought it.
Musk is the CEO of Tesla himself, as well as the CEO, CTO and chairman of SpaceX, and he also handles various other ventures and startups.
Twitter’s current CEO is Parag Agrawal, who will succeed Twitter founder Dorsey as CEO in November 2021.
Dorsey said at the time that he deeply trusted Agrawal as Twitter’s CEO and in his ability to lead the company.
But Musk, who has many criticisms of Twitter’s management, told Twitter’s board in an acquisition filing that he had “no confidence” in the company’s management.
image source,Reuters
During the new crown epidemic, Musk’s wealth soared to become the world’s richest man
How did Musk buy Twitter?
In early April 2022, Securities and Exchange Commission data showed that Tesla CEO Elon Musk owned 9.2% of Twitter stock.
Based on Twitter’s share price at the time, Musk’s stake was worth about $2.89 billion (£2.2 billion), making him Twitter’s largest single shareholder, ahead of Twitter founder Jack Dorsey’s 2.25% stake. The holdings are also more than four times higher.
At the time, Twitter invited Musk to join the Twitter board, but Musk declined to join.
He then announced on April 14 that it would buy Twitter for $54.20 (£42.20) per share for a total of $44 billion (£34.5 billion).
How much is Musk worth?
Musk is the world’s richest man, worth $269.7bn (£212bn) according to Forbes magazine, owns 21% of Tesla, the electric car company, and Musk’s private company SpaceX (SpaceX) is valued at as much as $100bn (£78bn).
Before the outbreak of the new crown, Musk was ranked 35th in the world in wealth in early 2020, but a year later, in January 2021, his wealth has surpassed Amazon’s Jeff Bezos (Jeff Bezos) and Microsoft’s Bill · Bill Gates.
Growing up in South Africa, Musk went to Canada to continue his university studies at the age of 17, then moved to the United States to further his studies, and founded the predecessor company of Paypal, and later became the CEO of the company.
BBC science and technology correspondent Zoe Kleinman (Zoe Kleinman) analysis:
Even Twitter itself didn’t take Musk’s acquisition plan seriously at first, and everyone thought it was just Musk talking. After all, although he is the world’s richest man, in his own words, “lack of cash” and in It’s his personal style to go viral on social media.
However, his pocket strength should not be underestimated. Musk, who is worth hundreds of billions of dollars, has the strength to get his favorite toy, so he put out the content of acquisition funds with substantial content, and finally obtained the approval of the Twitter board of directors.
Twitter didn’t make it clear why it didn’t want to be acquired by Musk in the first place, but it’s conceivable that any social media that’s been eyed by regulators from time to time will be more “open”, less content curated, and advocate for speech. The free financiers would of course be especially cautious.
Musk prefers a paid subscription business model rather than relying on advertising revenue. Such an operating model is very difficult to achieve for a platform that has not grown significantly in the number of users for a long time.
Musk’s Twitter after he takes over will be very different from now, and his personal brand appeal will also have an impact, especially with many adoring fans on social media.
