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- Twitter’s board has agreed to sell the company to Elon Musk for around $44 billion, or $54.20 a share, in cash.
- Musk says he will review Twitter’s revenue stream and revamp the platform’s free speech policies.
- The deal, expected to close this year, will take the social media platform private.
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The Elon Musk and Twitter plot has nearly come to a conclusion.
Twitter’s board has agreed to sell the company to the billionaire for around $44 billion, or $54.20 a share, in cash.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Bret Taylor, independent board chair of Twitter in an official statement. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Seemingly overnight, the company’s board has had a change in heart in its stance about the bid. The world’s richest person is simultaneously one of Twitter’s most popular users, known for his crude jokes, yet shares a hopeful view of the future.
The offer is a 38% premium to Twitter’s closing price on April 1, 2022.
As the man behind both Tesla and SpaceX, which have undoubtedly impacted transportation and space exploration, it’s untelling what Musk’s purchase could mean for the future of Twitter.
Allwork.Space is breaking down the entire history of the saga, from trolling tweets to poll-driven decision-making.
April 4, 2022
In early April, Musk purchased a 9.2% stake into Twitter, making him the largest shareholder of the company.
Musk’s acquisition, which is four times larger than Twitter founder Jack Dorsey’s, was equated to around $2.89 billion.
Prior to the acquisition, Musk had been highly critical of Twitter’s usership and policies around free speech.
Most of these “top” accounts tweet rarely and post very little content.
Is Twitter dying? https://t.co/lj9rRXfDHE
— Elon Musk (@elonmusk) April 9, 2022
The same day, he began reaching out to his Twitter followers to gain insight into what users wanted from the platform, such as an edit feature, which was then confirmed to be in the works by current CEO Parag Agrawal
April 10, 2022
Following his massive stake purchase, Twitter offered Musk a seat on the board.
— Elon Musk (@elonmusk) April 7, 2022
However, just one day before he was set to join the board, Musk walked back on the offer according to Agrawal.
“Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same day that he will no longer be joining the board. I believe this is for the best,” said Agrawal.
Had he become part of the social media platform’s board, Musk would have been barred from owning more than 14.9% of the company, which likely led to what events came soon after.
April 13, 2022
News slightly settled after Musk walked back from the board offer, but not for long.
Days after his decision to not join the board, former Twitter shareholders sued Musk, claiming that the billionaire had not properly disclosed his share acquisition.
According to U.S. securities law, investors are required to disclose acquisitions of 5% within 10 days of making the investment. Had Musk been compliant, this disclosure would have occurred on March 24.
As a result, the former shareholders stated that this delay meant Musk could purchase shares at a lower price, leading them to sell stock at “artificially inflated” prices.
Shareholders stated that Musk made “materially false and misleading statements and omissions” by not disclosing his Twitter investment by March 24 according to the class action lawsuit.
April 14, 2022
While Musk has stayed mum about the lawsuit, his sights were clearly set elsewhere.
In a filing with the US Securities and Exchange Commission (SEC), Musk offered to outright purchase Twitter for $43 billion, or $54.20 per share.
The shocking offer quickly took the social media platform by storm.
The Tesla CEO made it clear that if the acquisition was successful, he would take Twitter private, review its revenue stream, and revamp the platform’s free speech policies, which he has been highly critical of.
The SEC filing stated that Musk would sell off his shares if the board refused his offer. He added that this was “not a threat,” but a refusal of the bid would indicate that “it’s simply not a good investment without the changes that need to be made.”
Twitter revealed that it was reviewing the proposition and would make a decision based on the “best interest of the company and all Twitter stockholders.”
Even this response saw disapproval from the Elon “free speech absolutist” Musk, who believes that Twitter’s shareholders hold more power than the company’s board.
Taking Twitter private at $54.20 should be up to shareholders, not the board
— Elon Musk (@elonmusk) April 14, 2022
Musk stated that the bid would be his “best and final” offer.
April 15, 2022
The following day, Twitter’s board adopted a “poison pill” plan that appeared to be an indirect rejection of Musk’s offering.
A poison pill protects a company from an unwanted takeover by offering discounted shares to current shareholders if a person or entity purchases over 15% of stock without board approval.
By doing so, Twitter’s plan would make Musk’s takeover less valuable.
Soon after this news, Musk took aim at Twitter’s board, threatening to eliminate their entire pay if his deal went through.
Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there
— Elon Musk (@elonmusk) April 18, 2022
In response to the rule, Musk said he would make a tender offer that would allow Twitter shareholders to support the deal.
While the poison pill would keep shareholders from being able to tender their shares, Twitter became concerned that outright refusing the bid would hurt their negotiation arm and go against the desire of investors.
April 20, 2022
Despite the poison pill, Musk still moved forward with seeking financial advice from Wall Street.
While it would appear that Musk’s $261 billion fortune would be enough to acquire the company, Musk and his advisers began looking into debt financing with various partners last week.
Insiders stated that Wall Street has been split on whether it would support Musk or not.
Companies that were definitely ruled out included Blackstone, Brookfield Asset Management, and Vista Equity Partners. However, Morgan Stanley was in talks to provide the bulk of backing for Musk’s bid.
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April 24, 2022
On the Sunday following reports of his Wall Street discussions, news emerged that serious engagement was in play between Twitter’s board and Musk.
Over the weekend, the billionaire provided financial details into his $43 billion offer to purchase the company, which reportedly was attractive to the company’s board.
Although this was not a solidified guarantee that the board would take the deal, its piqued interest noted a significant shift in the conversation. Prior to the financial detailing, it appears that Twitter’s board was more concerned with protecting its brand from a potential takeover.
During its consideration, Twitter continued to investigate any proceedings between Musk and regulators, such as the SEC. In the past, Musk has been accused of misleading investors and breaking SEC foreclosure policies.
April 25, 2022
Over the course of around one day, Twitter’s board realized that selling the platform would be in the best interest of the company.
During weekend discussions, Musk revealed that he had solidified $25.5 billion of fully committed debt and margin loan financing, as well as a $21 billion equity commitment.
That is what led the Board of Directors to unanimously approve the transaction.
The deal is expected to be completed by this year, contingent upon approval of Twitter’s shareholders, regulatory approvals, and other customary closing conditions.
I hope that even my worst critics remain on Twitter, because that is what free speech means
— Elon Musk (@elonmusk) April 25, 2022
“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,” said Musk about the transaction.
“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. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
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