Everything you need to know about Elon Musk’s purchase of Twitter

Everything you need to know about Elon Musk's purchase of Twitter
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The offer is the latest twist in the internet mogul’s volatile relationship with Twitter.

Elon Musk, the billionaire, has made a substantial offer for Twitter.

Musk has bid $54.20 a share for each share of the powerful social media business, valuing Twitter at $43 billion. Tesla, SpaceX, and other businesses are already owned by Elon Musk, who owns 9.2 percent of Twitter.

In a letter to Twitter Chairman Bret Taylor on Thursday, Musk said, “It is now evident to me that the business will not prosper in its current form or satisfy [its] social imperative.” “Twitter has a lot of promise. It will be unlocked by me.

The offer, which Musk described as “the best and the last,” is the latest in a volatile relationship between Musk and Twitter since the tech tycoon revealed his involvement two weeks ago. Musk is a major shareholder in the social networking platform. Musk subsequently declined a place on Twitter’s board of directors, increasing suspicions that he will attempt a hostile takeover.
Here’s all you need to know about Twitter’s continuing feud with Musk:

Why is Elon Musk interested in purchasing Twitter?

Elon Musk, who has 81 million Twitter followers, is a frequent user of the site as well as one of its most outspoken opponents.

In March, Elon Musk polled his Twitter followers to see if they felt Twitter supported free speech. He called the survey’s findings “extremely important,” citing the fact that almost 70% of the 2 million persons polled replied “no.”

The first modification only pertains to government censorship; corporations like Twitter, on the other hand, have their own set of regulations regarding what is and isn’t allowed on their platform.

“Because Twitter functions as a de facto public marketplace, failing to preserve the ideals of free speech weakens democracy fundamentally.” In a follow-up tweet, he asked, “What is there to do?”

Elon Musk stated in his letter to Taylor that he invested in Twitter because he “believes in its potential to be the global platform for free speech.” Musk argues that the state-owned corporation must be privatized in order to achieve his aim.

What was Twitter’s reaction to this?

On Sunday, Twitter CEO Parag Agrawal cautioned staff that “distractions happen,” but he has yet to publicly comment on Elon Musk’s bid to acquire the company. According to The Verge, he informed Twitter employees that the firm is still analyzing Musk’s offer and would make a decision “in the best interests of our shareholders.”

Twitter stated in a statement that it had received the offer and that its board of directors will “seriously review the proposal” to decide the best course of action for the company and all of Twitter’s shareholders.

When asked when a decision will be made, Twitter did not immediately answer.

What are the chances that Twitter will take up the offer?

This, according to some observers, is highly unlikely. In a note Thursday, Ali Mogharabi, a senior stock analyst at Morningstar, said Twitter had a less than 50% probability of accepting the offer.

Twitter is likely to seek other purchasers, according to Ygal Arounian, an analyst at Wedbush Securities.

“The sale will not close at this [price] level,” Arounian wrote, “and Twitter’s board of directors will not regard this offer or Mr. Musk’s leadership of the firm to be in the best interest of Twitter, the company, or the shareholders.”

The offer, according to some of Twitter’s top investors, is too low. In a tweet, Saudi billionaire Prince Alwaleed bin Talal claimed Musk’s bid “doesn’t come close to the underlying worth of @Twitter given its growth prospects.”

“Twitter is too enormous to be owned and managed by one person,” Fred Wilson, a venture capitalist and an early investor in the firm, tweeted, adding that the site should be decentralized.

According to The Information, the board of directors found Musk’s bid “unwelcome,” and that Twitter should oppose the takeover.

“Taking $54.20 from the Twitter takeover should be up to shareholders, not the board,” Musk tweeted on Thursday.

How would Musk pay Twitter?

Elon Musk is claimed to be the world’s richest person, with a net worth of $264.9 billion, although it’s unclear how Twitter would pay.

Musk may sell his Tesla or SpaceX stock or borrow money using his interest in both firms as security, according to the Wall Street Journal. Neither solution is cost-effective.

Elon Musk remarked, “I have enough assets…” in a TED address on Thursday before changing his mind.

What if Twitter declines his offer?

In his letter to Taylor, Musk made it plain that if Twitter turned down the offer, he would reevaluate his status as a Twitter shareholder.
According to Mogharabi’s memo, the denial might cause Twitter’s shares to drop. Musk has also proposed the creation of a new social media platform.

“If Musk’s bid is refused, he may still try to gather cash to develop a comparable social media platform that can compete with Twitter,” Mogharabi said in a note. “Attracting millions of daily active users would be a tough order, though.”

Musk stated in his TED lecture on Thursday that if his offer was refused, he had a “plan B,” but he didn’t disclose what it was.

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