On October 27, Elon Musk closed the deal to buy Twitter.
Everything about this deal is amazing: a week before the first news about it, Musk said that he would not buy the company, as well as manage it — according to him, it would be a headache. And how suddenly he changed his mind after his entrepreneur friends talked to him: Twitter founder Jack Dorsey, PayPal founder and Musk’s old colleague Peter Thiel and venture capitalist David Sacks. And the fact that Musk found financing for this deal in a short time.
How Musk wanted and changed his mind to buy Twitter
The story of platform purchase by an eccentric entrepreneur has been dragging on since spring. In the summer, Musk refused to buy the company, citing the fact that its management refuses to share data on bots, which allegedly make up no more than 5% of all users of the platform. As a result, the parties began to sue: Twitter sued Musk in an American court in order to force him to buy the company.
Why Elon Musk refused to buy Twitter and how much he will have to pay for it
On October 7, the court ruled that Musk had until October 28 to buy the company or a full-fledged trial would begin, the outcome of which could be anything. Most likely, Musk would have to at least make peace with the Twitter management and pay him compensation, and at most — still buy the company.
On October 26, Musk suddenly appeared at Twitter’s headquarters in San Francisco, put the same company headquarters in San Francisco as a region on his Twitter account, and described his position as “main tweet.” Meanwhile, banks began transferring their part of the financing of the transaction to Musk’s accounts — $ 13 billion of a targeted loan.
The Internet remembers everything, including Musk’s tweets.
On April 4, Musk became the largest shareholder of Twitter. On April 5, the company’s management invited Musk to the board of directors, on April 11, Musk refused, and on April 15, Musk offered to buy the company at a price of $ 54.2 per share.
On May 13, Musk said that the deal is still on pause due to the issue of bots. In July, for the same reason, Musk refused to buy the company, and the case went to court.
On October 5, Musk suddenly wrote that it was necessary to buy the company after all and make an all-encompassing application based on it. By the way, a day before that, Musk’s lawyer informed Twitter lawyers that Musk still wants to close the deal.
It is interesting that about $ 7 billion Mask for this transaction was lent by different people and structures:
- Billionaire and Oracle co-founder Larry Ellison.
- Binance cryptocurrency platform.
- Saudi Prince Al-Waleed bin Talal.
- Several large investment funds: Fidelity, Brookfield and Sequoia Capital.
But this rather indicates a fairly high level of support for Musk, since there is little economic sense in Twitter.
What awaits Twitter
First of all, after closing the deal, Musk fired the company’s managing director, chief accountant and several top representatives of the company’s legal department. Musk made it clear that Twitter will change and he is dissatisfied with the company’s existing business model. It can be assumed that, given the unprofitability of the company, it is waiting for mass layoffs.
Musk himself stated that he wants to reduce the share of advertising in the company’s revenue from 80 to 45% through the introduction of subscriptions and payment services. In general, he has huge plans: by 2028 he wants to increase revenue by 4 times, to $ 25.4 billion, and the number of users — from 238 to 931 million.
In addition, Musk wants to rebuild the company into a super-application like WeChat. In such applications, people can text, call a taxi, send payments and do many other things without logging into other applications.
During the negotiations on the purchase of Twitter, Musk rested on his commitment to the ideas of freedom of speech and even said that he would restore the account of Donald Trump banned there in 2021 on the platform.
But at the same time, he added that “it will be impossible to say anything on the platform without consequences at all.”