American prominent businessman Elon Musk bought Twitter for $44 billion. This article will analyze the reasons and peculiarities of the deal in detail.
Elon Musk and Twitter. Why does he need this deal?
The boss of the Tesla manufacturer had agreed with the Twitter board of directors on a deal worth around 44 billion dollars. But he is still dependent on enough shareholders wanting to sell him their shares. Twitter and Musk previously wished to complete the acquisition by the end of the year. He has already bought a good nine percent stake in Twitter on the stock exchange in the past few months.
Earlier this month, tech billionaire Elon Musk suggested purchasing Twitter for $54.20 a share. The board of directors agreed to the deal, evaluating the company at about $44 billion. The social network was expected to back out of the deal. It took the so-called “poison pill” to avert a potential hostile acquisition. However, Twitter became more receptive to the bid after Musk revealed he had received $46.5 billion in funding. The businessman is known to be a popular Twitter user with more than 80 million followers but has been skeptical in recent weeks about how it is used and designed.
Musk declared his intention to purchase the network shares in April. The billionaire explained that he wants to withdraw the company from the stock exchange because “in its current state, it cannot serve the freedom of speech.” It should also be noted that he sold about $4 billion of his Tesla shares in the first days after he offered to buy Twitter, according to SEC documents.
Later, Musk wrote on Twitter that he put the deal on hold. He first wanted to wait for calculations to show that accounts without real users accounted for less than five percent. The online service published this estimate earlier in the week. Musk had previously stated that he wanted to ban accounts that are used to send spam messages from the platform.
The history of the deal
Insatiable Twitter user Musk has repeatedly accused the network of restricting freedom of expression. The 50-year-old adopts a similar tone to right-wing politicians who denounce alleged “censorship” by online platforms from the liberal-minded Silicon Valley.
In the past few years, Twitter had tried to take action against the spread of hate messages and misinformation – and after the storming of the US Capitol, it banned then US President Donald Trump. Musk, who is abusive to critics himself on Twitter, could end such content moderation.
Meanwhile, former President Donald Trump, whom critics tend not to see as a guarantor of a functioning democracy, also commented on the takeover. Musk is a “good man” who can bring “improvements” to Twitter, the right-wing populist told Fox News. However, he does not want to return to Twitter – he only wants to use the Truth Social platform he launched himself. Nevertheless, the online service announced on Monday (April 25) that it had reached a deal with Musk. Twitter will then be taken off the stock market.
It should be noted that Twitter has not yet been finally sold to Elon Musk – shareholders and US regulators must approve the deal. However, analysts assume that there will be no collapse of the deal. According to a document filed by the billionaire with the US Securities and Exchange Commission, several banks agreed to lend him $ 25.5 billion in total, including Morgan Stanley, which announced its readiness to issue a $ 12.5 billion margin loan secured by Tesla shares.