On Thursday, April 14, Elon Musk announced an offer to buy Twitter for $54.20 per share.
This is a huge story with lots of fast moving parts. It’s also a story that will likely stretch out over the next few months, maybe even longer. So we thought we’d put together a guide for you, our readers, that can be updated as things unfold. Because, like Elonwe ️ you.
So buckle up – it’s going to be a bumpy ride.
The last news:
The day after Musk announced his proposal to buy Twitter, the company’s board responded with a poison pill. This is basically the board’s way of saying, “Thanks, but no thanks.”
The poison pill consists of a new “shareholder rights plan” to give certain shareholders the right to buy more shares if Musk or another buyer tries to seize control. And it indicates that Twitter’s board plans to fight Musk’s bid to take full ownership of the company.
The story so far:
A thousand years ago, on April 4, 2022, Elon Musk announced that he had bought 9.1 percent of Twitter. The news that the world’s richest man was now (briefly) the largest shareholder of his favorite social media platform sent the stock price soaring and many a keyboard a-type.
Musk immediately began asking for suggestions on ways to improve Twitter by tweeting — what else — a poll. The company responded by offering him a board seat, a move that would have limited him to owning just 15 percent of the company. At first he said yes. Then he changed his mind and said no. Meanwhile, our Twitter and Musk experts, Casey Newton and Liz Lopatto, respectively, delved deeper into why Musk is flirting with Twitter and what the likely results would be.
After turning down a seat on Twitter’s board, Musk updated his filing with the Securities and Exchange Commission to indicate that he would not be a passive player in the company’s affairs. Gone was the language that he would limit his holdings to just 14.0 percent of the company. In hindsight, this was the first indication that he might be trying to make a little more of an impact than just buying some stock to serve as a board member.
Platformer’s Casey Newton isn’t alone in not believing Musk would launch a hostile takeover of Twitter. After the news broke that Musk had acquired 9.1 percent of the company’s stock, many people briefly assumed Musk would try to buy the entire company, only to conclude that he had already taken everything out of Twitter that he could. he wanted.
Casey was right when he argued that Twitter’s poison pill regulations may not be enough to stop Musk. But he also assumed Musk would just continue to troll the company through his tweets — which is certainly still a likely outcome.
Anyone who has been in the market to buy a home knows the “best and latest” offers. In his opening salvo, Musk claims that his offer to buy Twitter is just that. Whether that strengthens his position or ultimately corners him is too early to say. But it’s clear that he’s offering Twitter shareholders a fairly fair premium: $43 billion for a company with a $37 billion market cap.
Musk says Twitter needs to go private to undergo the changes that need to be made. These include an editing feature, an open-source algorithm, less moderation, and a higher bar for removing offensive tweets.
Musk is a very rich man. So of course he would say that he is not interested in buying Twitter to make money. He sees Twitter as the ‘de facto city square’ and wants to make the social media company’s algorithm open source. He tries to interpret the whole takeover offer as a kind of crusade to protect freedom of expression.
But even a free speech maximalist like Musk has to convince shareholders that his takeover offer is in their financial self-interest. What else are we actually doing here?
Musk is a prolific Twitter user. He’s also a troll and Liz Lopatto explains exactly what he needs to do to make people take him more seriously. Musk tends to shoot from the hip, but several corporate governance experts told us they doubt he really thought this all up.
He didn’t set up the funding to buy Twitter and keep it private. He works with Morgan Stanley, but the question is whether he really listens to them. Musk himself said he may not win in the end. If he manages to pressure Twitter into making the changes he wants, he can just withdraw his offer. Everything is possible.
Behind the scenes, Twitter board members plot their response to the takeover plan of the world’s richest man. There’s the poison pill, as well as previous provisions in the company’s bylaws, that could make it extremely difficult for Musk to take control.
Twitter’s first meeting after Musk’s bid was made public was an odd one. After serenading employees with Backstreet Boys and Aretha Franklin, the company said it would continue to evaluate the offering.
Employees told Alex Heath they were frustrated with the lack of a more detailed answer. They are concerned about the future of the social media platform and the possibility of layoffs.
Hours after announcing his offer to buy Twitter, Musk took the stage in Vancouver for a well-timed interview with TED Talk founder Chris Anderson. During the conversation, Musk spoke of his “obsession with the truth” and echoed comments he made in his SEC filing about wanting to protect free speech and democracy.
But as Adi Robertson points out, his understanding of free speech seems vague at best. After examining Musk’s comments, as well as previous attempts by Twitter’s leadership to confront speech laws around the world, she concludes that Musk may be given a rough wake-up call if he manages to buy the social media platform.
You can’t underestimate what a rollercoaster ride this has been so far. He buys shares! He’s on the board! No, wait, he’s not on the board! He could buy more shares! No, wait, he wants to buy the whole megillah† This thing has more twists and turns than a Shyamalan movie. And we’re not even halfway there yet.