Elon Musk purchased Twitter for $44 billion on Monday. Musk, Tesla’s CEO and the world’s richest man intends to take the social-media company private and has stated that he wants Twitter to adhere more closely to the principles of free speech, which he called “the bedrock of a functioning democracy” in a statement. (In the same statement, he described Twitter as a “digital town square where vital issues affecting humanity’s future are debated.”) Musk is a frequent tweeter, and it is expected that he will continue to use the platform, possibly reactivating former President Donald Trump’s account. He is also believed to be less likely to ban users for violating the platform’s policies which themselves may change.
A Bloomberg Opinion columnist who has been comprehensively reporting on and analyzing this story in his newsletter for the past month, about Musk and what the future holds for his newest acquisition. We discussed how Musk has used Twitter to further his business interests, how he views free speech, and why Twitter’s influence has long outweighed its financial value during our conversation, which has been edited for length and clarity.
Why do you think Elon Musk is interested in purchasing Twitter?
I assume it’s because he has some genuine political and social beliefs about how Twitter should be run, and he believes it isn’t. I also believe he derives a lot of pleasure and utility from tweeting and desires that it is optimized for his use. Because he is a very strange public figure on Twitter, the value of his company is increased, and he clearly sees a lot of value in tweeting and probably wants to own that for himself.
Who Sold Twitter To Elon Musk?
Twitter’s board initially enacted a poison pill anti-takeover measure, which could have made a takeover attempt prohibitively expensive. However, when Musk outlined the financial commitments he’d lined up to back his $46.5 billion offer — and no other bidders emerged — the board began negotiations with him.
Bret Taylor, the chair of Twitter’s board of directors, sought to reassure employees that the agreement with Musk prioritized “operational continuity” until the transaction was completed.
“I think we’re very confident that (the deal) gives this team the ability to continue to make the company successful in the time between signing and closing the transaction,” he says.
Discussions over the deal, which appeared to be stalled last week, heated up over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
After Musk made his offer, Twitter implemented a poison pill to prevent him from increasing his more than 9% stake in the company to 15% without first negotiating with its board. In response, Musk threatened to launch a tender offer in order to gain Twitter shareholder support for his bid, according to Reuters.
Twitter’s board was concerned that unless it sought to negotiate a deal with Musk, many shareholders would support him in a tender offer.
While the poison pill would have prevented Twitter shareholders from tendering their shares, the company was concerned that it would have significantly weakened its bargaining position if it was shown to be going against the wishes of many of its shareholders.
The transaction marked the end of Twitter’s tenure as a public company, which began with its initial public offering in 2013.
“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,” Musk said in a statement.
The $267 billion business tycoon has over 84 million Twitter followers and tweets several times per day.
Users can post and interact with messages known as ‘tweets’ on the site. Registered users can post, like, and retweet tweets, but unregistered users can only read publicly available tweets.
He insists that his takeover is motivated by a desire to protect Twitter as a platform for free expression rather than censorship.
Elon Musk said “‘Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don’t care about the economics at all,’ he said in a recent public talk.”
What will happen to Twitter now?
Musk has recently proposed loosening Twitter content restrictions, as well as ridding the platform of fake spambot accounts and moving away from advertising as its primary revenue model.
Musk believes he can increase revenue by offering subscriptions that provide a better experience to paying customers – possibly even an ad-free version of Twitter.
When asked if there are any limits to his notion of ‘free speech,’ Musk said during a recent TED interview that Twitter would abide by national laws that restrict speech around the world.
Beyond that, he stated that he would be very hesitant to delete posts or permanently ban users who violate the company’s rules. He is said to prefer temporary ‘timeouts’ for users who violate the new rules.
The story about Hunter Biden’s infamous laptop has been at the forefront of the debate about Twitter and censorship.
Twitter initially suspended the New York Post’s main account after it published an article about the scandal and demanded that it remove tweets referencing the Biden articles.
It justified the ban at first by citing a prohibition on distributing hacked material but backtracked when the story was proven to be true.
Musk has also announced plans to make the site’s algorithms open-source, which means that the code used to create them will be publicly available, allowing users to see how specific posts were served to them in their timelines.
He stated that he is doing this in the name of trust and that this model is preferable to having tweets mysteriously promoted or demoted.’
However, some experts have already suggested that this plan has limitations because very few people will be able to understand how the code used in these systems produces the results they do, even if the move would be a significant step forward for general transparency.
Why are some Twitter employees unhappy?
Employees at Twitter, like the rest of Silicon Valley, tend to lean left, making them more skeptical of Musk than those on the right.
Among those complaining about the takeover was software engineer Addison Howenstine, who said his new boss could be ‘dangerous to democracy.’
Then there’s the issue of job security and Musk’s new working environment.
While Twitter has guaranteed employees’ jobs for the next six months and stated that ‘no layoffs are planned,’ any HR decisions made by the Tesla CEO will be up to him.
When Gerard Taylor, a senior software engineer, tweeted about how Twitter’s “company culture” might change under Musk, he reflected widely held concerns about Twitter employees.
Elon Musk will be able to keep running Twitter?
For years, Twitter investors have been concerned about the company’s slowing revenue growth.
Its most recent quarterly results revealed that revenue grew slower than expected, despite increasing by 22% to $1.6 billion in the final three months of 2021.
However, daily active users increased by 25 million last year to 217 million, with the company aiming to reach 315 million by the end of next year.
Despite some headwinds, Musk’s massive $264.6 billion fortune appears to be more than capable of financing Twitter for the foreseeable future, and his claim that he “doesn’t care about the economics of the site” should also reassure fans.
How Elon Musk is Financing the deal of Twitter?
Musk has raised $25.5 billion in debt, including a $12.5 billion margin loan against his Tesla stock, from a group of banks led by Morgan Stanley.
He has also promised to provide $21 billion in equity financing for the takeover, putting him on the hook for more than 70% of the purchase price unless he can find other backers.
Musk has a total net worth of $264.6 billion, so his $44 billion bid is a small portion of his fortune.
Let us know your opinion on this matter. What do you think, why Elon Musk bought Twitter, and what benefit did he get from it.?