Twitter sold for $44 billion

After much speculation, Elon Musk reaches a deal to buy out Twitter for $44 billion.

The announcement raised the eyebrows of millions of people, wondering what plans the billionaire had for the social network.

Let us move back to the beginning of April to understand the revolutionary business deal. Elon Musk, a prolific Twitter user with 83 Million followers, proposed to buy out the company after he had purchased a 9% share in the company. Twitter evaluated the offer and initially countered the offer with a poison pill approach. “A poison pill strategy gives existing shareholders the right to purchase additional stock at a significant discount, thus diluting the holdings of a new, hostile investor. It is officially known as a shareholder rights plan.” (business-standard.com) After much deliberation, the news broke of the company accepting Musk’s offer.

The Twitter board was initially against the idea as they were unsure of Musk’s proposition. However, after the billionaire laid out financial plans, the board was convinced that the deal would be profitable for the company and shareholders. After a lot of back and forth, the only step left before Twitter becomes a private asset of Elon Musk is to ask all shareholders to vote and approve the deal.

Elon Musk is currently the largest Twitter Stakeholder, owning 9,2% of the business. A day after Musk disclosed his stake Twitter announced that Musk would be joining the company’s board, a proposition that Musk declined because accessing the company board would have escalated his share to 14.9%, preventing him from buying the company. A few days after the dismissal, Elon Musk sent a letter to Bret Taylor, the board’s chairman, laying down his offer to transform the social network into a private company by buying Twitter for $54,20 per share. Tesla’s CEO described his offer to Twitter as “best and final”, and if his proposal was not accepted, he would reconsider his position as a shareholder of the company. This letter shook the entire board, leaving them wondering if the deal was fair and profitable. After a series of meetings, board chairman Bret Taylor stated that “this is the best path forward for shareholders.”

With the deal on the verge of confirmation, the public has several questions about Elon Musk’s plans for the social network platform.

The richest man, according to Forbes, said: “Twitter has tremendous potential” that would be unlocked through a series of modifications aiming to relax some content restrictions and eliminate fake accounts. He shared some of the major ideas he had to make Twitter the new revolution. Tesla’s CEO said that “Free speech is the bedrock of democracy and Twitter, the digital Time square where matters vital to the future of humanity are debated.”  According to Musk, Twitter should allow all legal speech. He has yet to explain how he will make the platform more profitable, which is one of the fundamental challenges facing the social network. Twitter struggles to make money even though it is an influential platform, but it does not have more users than Facebook, Instagram, or Tiktok.

Our thoughts at NCI on the takeover

The coming days will be an interesting journey to watch the development of Musk’s vision for Twitter. While it may take a few weeks to start seeing new changes, one of the leading questions is whether Donald Trump’s account will be unsuspended – dragging a refreshed debate of the free speech debate back into the heart of the acquisition. Another interesting point is whether recently appointed CEO Parag Agarwal will remain in power considering Musk has expressed his disappointment with the performance of the board. Changes in leadership, revenue streams, user policies and the ethos of the business are expected and will be under scrutiny over the next few weeks as the world’s richest man takes control over a digital democratic speaking arena for users.

The shift is more on the societal impact of free speech, expression of state, self and community and the ability for the powerful to have a voice or not to have a voice. Unless Musk has better advertising or branding opportunities for businesses, it will be business as usual for brands.

 

Naz Consulting International is a South African Black Woman-Owned Level 1 BEE company. We are Media and Communication Specialists. We provide solutions for brand development, online conferencing and management; and reputation management

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After much speculation, Elon Musk reaches a deal to buy out Twitter for $44 billion. The announcement raised the eyebrows of millions of people, wondering what plans the billionaire had for the social network. Find out more in the article below.

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