Elon Musk has taken over Twitter. The founder of Tesla has fulfilled his threat and has managed to close an agreement this Monday with the shareholders of one of the most influential social networks in the world to acquire it for $54.20 per share, which values the company at about $44 billion. . After several weeks of ups and downs, corporate movements and marathon meetings, Musk has managed to fit one of his obsessions into his bag of companies: Twitter. What will happen now with the social network? It is unknown, although the one who is considered one of the richest men in the world intended to take the company public and turn it into a paradise of freedom of expression.
“The Twitter Board of Directors has reached an agreement with Elon Musk,” the president of the social network, Bret Taylor, tweeted. A message to which the CEO of the company, Parag Agrawal, has responded by recalling that Twitter “has a purpose and a relevance that impacts the entire world.” “Deeply proud of our teams and inspired by work that has never been more important.”
Musk, who has 83 million followers on this network, has explained that his attack on Twitter is mainly motivated by the revision of its content moderation policies and by doubts about freedom of expression on the platform. In recent years, Twitter has stepped up its response to abuse and extremist activity, suspending the account of former US President Donald Trump in January 2021. At the moment it has already announced that when it controls Twitter it will end the robots that cause spam in the social network and all accounts belonging to people will be authenticated. His assault on the social network began with the purchase of almost 10% of its capital at the beginning of April.
“I invested in Twitter because I believe in the potential to be the platform for freedom of expression around the world and I believe that freedom of expression is a social imperative for a functioning democracy. However, since making my investment I have realized that the company will not prosper or serve this social imperative in its current form. Twitter needs to transform into an unlisted company”, he stated then.
When the Twitter management learned that Musk would be the company’s largest shareholder, he tried to ride that wave by attracting his new boss to his side. The plan was to give him a chair on the board of directors and play along on the platform itself, which Musk uses very actively, even if that meant revealing strategic plans such as the famous button to edit tweets.
But Elon Musk refused to join the board on the same day he was to be officially appointed, saying he did not trust the management’s ability and launching an offer to buy the entire company at $54.20 a share. The figure bears the “420” that is used as a synonym for marijuana consumption, a joke that the businessman had already made days before when he published a photo of himself smoking a joint along with the phrase “the next board of directors of Twitter is going to be Handsome”.
Musk offers a 38% premium on the value of the shares on April 1. Some 40,000 million euros in cash. The movement of the founder of Tesla was considered hostile by the direction of Twitter, whose board of directors unanimously approved in response a special plan that can be activated in the event that someone accumulates more than 15% of the shares and uses them to skipping the board and gaining control of Twitter. It is what in the jargon is known as poison pill or “poison pill”, the straw to try to hinder Musk’s plans.
The threat was useless. Elon Musk responded with a message to the US stock market regulator announcing that he had raised the $46.5 billion to gain full control of Twitter and that he was considering doing so through a hostile takeover bid. The tycoon had reached an agreement with a group of investment banks to provide him with the necessary capital to face the operation. His intention is to be solely responsible for the social network and take it out of the stock market.
Musk knows how to navigate perfectly in a world of financial sharks. The largest shareholders of Twitter are large investment fund managers such as Vanguard or BlackRock, the investment bank Morgan Stanley or the Saudi prince Al Waleed Bin Talal. How do you get these shareholders to support you? Among the investment banks that will lend their support to the tycoon to carry out the operation is also Morgan Stanley, which is the one that will put the most money on the table. The group of lenders also includes Bank of America, Barclays, MUFG, Societe Generale, Mizuho Bank and BNP Paribas.
Musk’s announcement rendered the “poison pill” ineffective. This past Sunday, several Twitter executives met with Musk to close a possible sale agreement for the social network that lasted until Monday. Last week had been plagued by private meetings between the founder of Tesla and several of Twitter’s largest shareholders, who according to some sources collected by The New York Times, would have expressed their support for the purchase offer. He got it. Musk already has his new toy.