UPDATE [11/07/22]: The long-running saga between Elon Musk and Twitter has taken a turn for the worse. At least for the social media platform.
In May, the takeover was “temporarily on hold” as Musk awaited data on the percentage of fake and spam accounts within Twitter’s 229 million daily active users. For years, the company has maintained the demographic was less than 5%, while the world’s richest man himself believes it’s realistically around 20% or more.
Over the weekend, a letter filed with the US Securities & Exchange Commission by Musk’s lawyer indicated Twitter has failed or refused to provide the necessary information surrounding Twitter’s bot problem. Which is why the deal is now on track to be terminated.
“Sometimes Twitter has ignored Mr Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr Musk incomplete or unusable information,” reads the aforementioned letter.
“While Twitter has provided some information, that information has come with strings attached, use limitations, or other artificial formatting features, which has rendered some of the information minimally useful to Mr Musk and his advisors.”
But at the risk of joining the tinfoil hat brigade… could this have always been the plan?
To recap, during the months in which he had any kind of say, Elon Musk has already:
- “Cleaned house” with the firing of two high-level executives including General Manager Kayvon Beykpour (while on paternity leave) and Revenue & Product Lead Bruce Falck; more recently, 30% of Twitter’s talent acquisition team has also been laid off.
- Potentially lowered the public value enough for a discount acquisition if he’s still game in the near future, according to Tulane University Law School Professor Ann Lipton.
- And potentially exposed Twitter for severely underreporting its spam and fake account numbers.
4D chess or simply too big to swallow — you be the judge.
Twitter has hired “merger law heavyweight” Wachtell, Lipton, Rosen, & Katz to sue Elon Musk for backing out. As per the original agreement, at the very least, Musk will be required to cough up a $1 billion break-up fee.
UPDATE [27/05/22]: The tech rout hasn’t been kind to the Technoking of Tesla. In addition to his electric automaker’s stock price copping a red-hot correction, Elon Musk has seen all his paper gains from Twitter completely wiped out — and then some.
In late April, Musk’s investment yielded profits in the way of US$1.1 billion / AU$1.55 billion. Now, it represents a US$40 million / AU$56 million loss.
Twitter’s most recent dip can be attributed to the mass sell-off experienced by social media and advertising stocks this week after Snap announced it would miss its Q2 revenue target.
“Snapchat’s owner has sent ripples across the market for social media companies,” AJ Bell Investment Director Russ Mould explains to Business Insider.
“Tighter monetary policy – meaning less and more expensive fun money for investors – and a series of share price crashes are dampening appetite for this sort of stock.”
According to Bloomberg, Elon Musk has sheared off US$58.7 / AU$82.5 billion from his net worth since the beginning of 2022.
UPDATE [15/04/22]: The seduction period is over. Funding has officially been secured. Elon Musk has struck a deal to acquire the entirety of Twitter for US$44 billion / AU$61.4 billion.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” the world’s richest man expressed via statement following the purchase.
“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”
UPDATE [15/04/22]: Less than two weeks after becoming its largest shareholder (now the second-largest after Vanguard) and turning down a seat at the board, Elon Musk has now made a US$43 billion / AU$58 billion offer to buy the entirety of Twitter – claiming the social media platform needs to be rebuilt as an “inclusive arena for free speech.”
The Tesla CEO publicised said offer via Twitter itself. Posting a link to a filing with the US Securities & Exchange Commission, under the proposed plan, Musk will pay US$54.20 per share in cash, which represents a 54% premium over the January 28th closing price.
“The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders,” Twitter expressed in a statement.
Original Article – Elon Musk Becomes Twitter’s Largest Shareholder, Stock Price Climbs By 27%
As the classic wisdom dictates, spend your money where you spend your time. For Elon Musk, this means officially becoming the largest shareholder of Twitter.
It only stands to reason that a man immortalised within the culture by his digital antics would have something of an attachment to the platform – despite criticising its adherence to free speech principles these past few weeks. At one point, Elon Musk even threatened to establish his own social media platform as an alternative to the likes of Twitter; although this wouldn’t exactly be the first occasion he riled up his direct audience of 80 million followers and sent global headlines into a frenzy using nothing more than a few characters.
SEC regulatory filings indicate the world’s wealthiest man acquired 9.2% of Twitter, placing him ahead of mutual-fund company Vanguard (8.8%) and dwarfing Twitter’s former CEO Jack Dorsey (2.3%). While the purchase price has not yet been disclosed, the 73 million shares were valued at approximately US$2.89 billion / AU$3.83 billion at the close of trading last Friday.
Already, the passive investment has yielded considerable gains. According to The New York Times, by the end of Monday’s trading session, word of Elon Musk and his mammoth buy-in had sent the Twitter stock price skyward. Increasing by over 27%, in a matter of days, US$2.89 billion / AU$3.83 billion had effectively become US$3.7 billion / AU$4.9 billion.
“Oh hi lol” the billionaire chief executive of Tesla and SpaceX tweeted shortly after the news he had bought a chunk of Twitter without elaborating any further.
It’s not immediately clear what direction Twitter will now take in light of this development. Perhaps this is how the C-suite memelord intends to step up his beef with Russian President Vladimir Putin.