$43 billion privatized Twitter, Musk wants to be a "savage"?

The Twitter journey is not destined to be smooth sailing.

Wen 丨 straight through IPO ID: zhitongIPO

Author 丨Han Wenjing

Musk, the "ready player one," reached out to Twitter again this time.

Yesterday, Tesla CEO Elon Musk offered to buy Twitter for $54.20 per share in cash, a deal that would reach $43 billion.

Musk called the offer his best and final offer, "If it's not accepted, I need to reconsider my position as a shareholder." ”

On April 15, it was reported that twitter's board of directors considered taking steps to avoid the company being acquired by Musk in a hostile takeover after Musk issued an unpopular offer to take it privately. No one expected that Musk would one day become "a barbarian at the door." ”

As a heavy Twitter user, Musk has more than 80 million followers on Twitter, often "surfing" on Twitter, and it is not an exaggeration to call him the "king of Twitter".

Since the beginning of this year, Musk, who is not short of money, has continued to invest in Twitter, spending a lot of money to play social, and before proposing to privatize Twitter, Musk has accumulated 9.1% of Twitter's shares, becoming its single largest shareholder.

Twitter's "uncrowned king" has finally been crowned, and there is speculation about where Musk will take the veteran social media.

Musk, the largest shareholder, is not on Twitter's board

Musk's acquisition came prepared, not on a whim.

As ceo of Tesla and SpaceX, Musk has recently become more interested in Twitter, and has been in the making for a long time.

Musk has been buying Twitter stocks this year, buying more than 620,000 shares of Twitter stock since Jan. 31. He has not been absent from trading every trading day since then, buying a maximum of 4.8 million shares in one day.

The latest Securities and Exchange Commission (SEC) filings show that Musk holds a 9.1% stake in Twitter. Quietly, Musk has become Twitter's largest shareholder.

Musk also looks like a helmsman, and has recently posted a number of tweets in a row to "point out the country" to Twitter. Examples include proposing to turn the social media company's San Francisco headquarters into a homeless shelter because "no one's going there," or asking fans if they support removing the letter W from Twitter to make the word more "easy".

On April 5, Twitter announced that Musk would become a member of Twitter's board. Twitter's invitation to Musk's board could prevent the world's richest man from taking a stake in Twitter and becoming a "barbarian at the door" in the short term.

Just when the world was expecting Musk to join the board, Musk suddenly changed his mind.

On April 11, Twitter's Twitter CEO tweeted that Musk had refused to join the company's board. Musk himself did not explain this, and he sent a tweet that "cover your mouth and smile."

Musk, who has always been "elusive", made such a decision is not surprising.

Musk, the largest shareholder, said his non-participation in Twitter's board of directors has caused concern, and speculation may be because Musk is seeking greater control.

Under a previous agreement with Twitter, Musk will only receive up to 14.9 percent of Twitter during or for 90 days after he joins the board. The provision is intended to limit Musk's influence on Twitter.

That said, if he joins the board, Musk can't buy Twitter in the short term. But since Musk is no longer on Twitter's board, the 14.5 percent limit will also cease to exist.

Today, Musk's refusal to join the board is actually preparing for the subsequent acquisition of Twitter. Twitter's shareholding structure is very fragmented and there are no super voting rights. From the highest $73 / share in the middle of last year to the present, Twitter's stock price has gradually fallen back to about $45, and at this moment, Musk has made a big acquisition, and it has not bought at Twitter's highest point.

The New "King of Twitter"

As an executive at several companies, one of Musk's jobs also includes speaking on Twitter.

Musk is a heavy user of Twitter, currently has more than 80 million followers, and even sends dozens of messages a day at the most, musk has also been ridiculed as the "king of Twitter" after Trump.

Since publicly disparaging Zuckerberg in 2018, Musk has stepped back from Facebook and Instagram to focus on Twitter.

Musk, who has achieved wealth freedom, has achieved free speech through Twitter. On Twitter, Musk is "mouth-shut", often sharing company information, and thus causing himself trouble.

In August 2018, Musk posted on Twitter that he had received enough funds to take Tesla private for $420 per share, saying that there were sufficient financial guarantees and calling on shareholders and employees to support him.

As a result, Musk was accused by the SEC, and he and Tesla each paid $20 million in settlements, and lost the chairman position as a result.

By taking Twitter privately, Musk learned his previous lessons and conveyed his intentions by forwarding a latest document published by the U.S. Securities and Exchange Commission (SEC). Instead of announcing Tesla's consideration of privatization directly through the social platform Twitter, as was the case in 2018.

As we all know, Musk "stole" Tesla, will he continue to "steal" Twitter?

When tesla is mentioned, most people think of Musk. In fact, Tesla's earliest founders were two engineers from Silicon Valley who created Tesla in 2003 out of interest in electric cars.

Because the development of electric vehicles requires a lot of technical and financial support, Tesla brought in $7.5 million from Musk in 2004 to raise funds, and Musk became the largest shareholder and chairman.

Later, under a series of operations by Musk, the original founder of Tesla retired from the glass of wine and released the military power, and Musk naturally became the sole spokesperson of Tesla. Because of this, at that time, many media published reports titled "Musk stole Tesla".

Today's acquisition of Twitter is the same as Musk's routine of taking over Tesla.

Whether Musk will let Twitter become the next Tesla is unknown, but it is certain that with the "net red" Musk with its own traffic attributes becoming the largest shareholder, musk may be able to alleviate Twitter's decline of "increasing revenue without increasing profits" to a certain extent, and Musk can also better promote Tesla and Space X on Twitter.

Although Musk is the world's richest man with assets of more than 100 billion US dollars, his assets are mainly based on physical manufacturing, missing an important part of the "media", Tesla also claims that there is no public relations department.

Some analysts believe that Musk's move may be drawing on Bezos's acquisition of the Washington Post that year. In 2013, Bezos acquired The Washington Post for $250 million, gradually becoming Amazon's mouthpiece, cheering for Amazon, and with Amazon's help, The Washington Post also achieved digital transformation.

Musk "can't escape resistance"

Musk has spent his life interpreting the spirit of challenge and geek spirit, but his Twitter journey is destined not to be smooth.

Musk also faces many challenges to complete this acquisition. On the one hand, there is the will of shareholders, and on the other hand, there are real problems of capital and regulation.

As Musk issued a privatization offer to Twitter, people familiar with the matter said that after Musk issued an unpopular privatization offer, Twitter's board considered taking steps to avoid the company being acquired by Musk in a hostile way.

One option currently under consideration would be the adoption of the "Poison Pill Plan", the Shareholder Rights Plan, which allows existing shareholders to purchase additional shares at a discounted price, thereby effectively diluting the opposing party's ownership interests;

Saudi Prince Alwaleed, a key shareholder of Twitter, has publicly stated that he would reject Musk's offer for the takeover, citing too low an offer.

Twitter CEO Agravar tried to reassure employees, saying the company had not been "held hostage" by news that Musk had proposed to buy the company.

In addition to shareholder resistance, what hangs above Musk's head are more realistic financial and regulatory issues.

In the 2022 global billionaire list released by Forbes a few days ago, Musk won the championship with $219 billion. It's worth noting, though, that musk's assets are mostly Tesla and SpaceX stocks, and he doesn't necessarily have enough cash in his hands. In addition, musk's purchase of Twitter stock may also trigger regulatory alerts, and regulators may investigate his alleged market manipulation allegations.

It is also worth noting that Musk's reason for buying Twitter is to promote free speech, and he has criticized Twitter for not abiding by free speech before taking a stake, which means that he may plan to relax Twitter's current content control regulations, and Twitter has been criticized by users for having a lot of hateful and racially discriminatory content in the early two years, which may be boycotted by Twitter management and users.

As for the question of "what to do if the takeover offer is eventually rejected by Twitter", Musk said that there is no way to answer the question at this time.

But Musk made it clear that he still had Plan B. "I don't like to fail." He said.

(First image source: Figure worm)

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