Elon’s crazy and risky bet to buy Twitter
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He is the unstoppable man, Elon Musk is unpredictable, he is already the main shareholder of Twitter with a little more than 9% of its capital, and now he wants to take over the entire company and remove it from Wall Street, with the declared idea of making it “the platform of freedom of expression in the world”.
With his action and his offer on Twitter, the latter is already valued at 43.4 billion USD, against about 36 billion at present, comes after two weeks of ups and downs between the richest man in the world and the social network, and raises many questions about his intentions and the future of the bluebird. “I propose to buy 100% of Twitter at a price of 54.20 USD per share in cash,” said the Tesla boss in a document sent Wednesday to the U.S. stock exchange regulator, the SEC.
The main executives of the Twitter group were surprised by this surprise attack but the board of directors of the Californian group replied “examine with attention” this offer. Elon Musk said Thursday, April 14, he had “sufficient funds”, assured that he had a plan B if the acquisition failed, and also that he was not looking to “make money”, during a live interview at the Ted 2022 conference.
“I just have a strong intuition that having a public, broadly inclusive platform that you can trust is extremely important for the future of civilization,” he detailed. In his official letter, the billionaire states that this is “his best and final offer” and threatens to “reconsider his position as a shareholder” in the social network.
“Unlocking the potential”
Elon Musk is an active member on Twitter, where he has nearly 82 million followers, Elon Musk made a high-profile entry into the company’s capital early last week by acquiring 73.5 million shares of the company’s common stock. He was offered a seat on the board but finally turned it down on Sunday, after a series of suggestions to change the platform, such as adding an “edit” button or removing ads, Twitter’s main source of revenue.
The Tesla boss has also sent out derogatory tweets, wondering if the Twitter network was “dying” because some of the most followed accounts don’t post much, or proposing that the group’s headquarters in San Francisco be turned into a shelter for the homeless. His priority, he said Thursday in the interview, would be to eliminate spam and scams. Elon Musk especially wants to make the moderation of content more transparent, so that tweets are no longer “mysteriously promoted or demoted.
The mythical boss of Tesla is a fan of polemics, provocations and dubious jokes, he advocates a broader vision of freedom of expression. “When in doubt, let the tweet exist,” he said, before acknowledging that he did not have “all the solutions. Many NGOs and political figures, on the other hand, consider that Twitter allows too much misinformation and hate speech.
“Since I made my investment, I realized that the company would not thrive and would not serve, in its current form, its societal imperative” of a functional democracy, argues Elon Musk in his official letter. “Twitter has extraordinary potential. I will unlock it,” he promised. “He’s an extremely privileged man, who thinks he can do anything, and I’m not sure the Twitter he has in mind is a platform that would suit the majority of people using it today,” commented independent analyst Carolina Milanesi.
“We are not surprised by Mr. Musk’s plan to fully acquire the company after rejecting an offer to join the board, which would have handcuffed him,” reacted Angelo Zino of CFRA. On Wall Street, Twitter’s stock soared after the announcement, before falling slightly during the day.
“I’m not sure I’ll be able to buy it,” the businessman admitted Thursday, before explaining that he hoped to get as many existing shareholders on board as possible. One of them has already reacted: the Saudi prince and investor Al-Walid ben Talal declared on Twitter that he “rejected” an offer that was too low compared to the “intrinsic value of Twitter”.
By his action on Twitter, Elon Musk has put pressure that does not leave many options to the leaders of Twitter, say analysts at Wedbush Securities. “We believe this rollercoaster ride will end with Mr. Musk acquiring Twitter after this hostile takeover,” they predict in a note. “The board will likely be forced to accept this offer or take active steps to sell Twitter.”