“The bird is freed,” tweeted Elon Musk, founder of Tesla and SpaceX, after completing the purchase of Twitter in a $44B deal. Yes, Elon Musk is the new boss of Twitter.
In this article, we’ll explore how the drama surrounding Elon Musk’s Twitter acquisition played out.
Elon Musk, who enjoys 112M followers, on April 4th, Musk announced that he had acquired 9.2% of Twitter’s stock worth $2.64B, making him the company’s largest shareholder.
After the announcement, Twitter invited Musk to join their company’s board, which Musk accepted. However, he then published several tweets that were critical of the company and reversed his decision to join the board. In addition, he informed the board of his intention to make an offer to privatise Twitter.
On April 14th, 2022, he offered to purchase the company for $44 billion, or $54.20 per share, and take it private. However, the bid was described as a hostile takeover attempt, and Twitter responded that the board would “carefully review the proposal.”
Well, technically, he asked for the price back in 2017.
On July 8th, Musk announced his intention to terminate the proposed acquisition, citing that the company breached multiple merger agreement provisions.
In a filing, Musk’s lawyers said, “Twitter had failed or refused to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company’s business performance,” reports Reuter.
In response, Twitter’s chairman, Bret Taylor, said the board planned to pursue legal action to enforce the merger agreement.
On October 3rd, Musk decided to move forward with his proposed acquisition on the condition that Twitter drops its lawsuit.
On October 27th, Elon Musk closed the deal!
How Musk plans to finance the deal is still hazy. Earlier this year, he managed to get some financial backing from several investment banks in the form of debt financing. He also received support from influential investors such as venture capitalists and tech CEOs.
Soon after closing the deal, he fired top executives, including Parag Aggrawal (CEO), Ned Segal (CFO), Vijaya Gadde, and Sean Edgett. Reuters reported that the executives were escorted out of the company’s headquarters by security.
Nonetheless, it was a lucrative offer for all the executives, thanks to “change in control” provisions in employment contracts for top leadership. You can check out the provisions that are disclosed in regulatory filings. According to the contract, the ousted executives will walk home with huge payouts.
According to Business Insider, Parag Agrawal will receive the largest payout of $38.7 million.
Ned Segal will get a $25.4 million payout, while Vijaya Gadde and Sarah Personette will leave with $12.5 million and $11.2 million, respectively.
Reason behind acquisition
In a tweet to advertisers, Musk said, “The reason I acquired Twitter is because it is important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated healthily, without resorting to violence.”
He added, “Twitter cannot become a free-for-all hellscape where anything can be said with no consequences. The platform must adhere to the laws of the land.”
“I didn’t do it because it would be easy. I didn’t do it to make more money. I did it to try to help humanity, whom I love,” he adds.
Well, here’re some of the reactions on Twitter post the acquisition:
There are a lot of questions about what this means for Twitter’s future. Will Musk change the way the platform operates? Only time will tell. In a tweet, Elon Musk said he would form a content moderation council with diverse viewpoints.
However, he added that major content decisions or account reinstatements would only happen after that council convenes.
Further, Musk also tweeted a poll on bringing back the Vine.
Elon Musk also tweeted that this acquisition will play a crucial part in developing a super app called X.
An everything app, similar to WeChat, encompasses various services like video chatting, games, photo sharing, ride sharing, food delivery, banking, and shopping, among other things.
In another development, Twitter is reportedly considering a $ 20-a-month subscription charge for the verified blue tick mark.
A recent report from The Verge suggests that the new Twitter Blue subscription could cost more than that – up to $19.99. The report also states that blue checkmarks will be lost to users who don’t subscribe within the given 90 days and that employees working on the project have been given until November 7th to implement the changes.