Elon Musk finally buys Twitter for 44 billion dollars
Although it had been rumored for a few weeks and it seems that the company’s movements indicated otherwise, today Twitter’s main shareholders announced that they have accepted Elon Musk’s takeover offer to acquire 100% of the social network.
The co-founder of Paypal, Tesla and SpaceX, among others, paid $54.20 per share, which brings the total amount of the transaction to $44 billion.
This offer was made on April 14, a few days after it was made public that he had become Twitter’s largest shareholder by taking 9.2% of the shares. At that time he was offered a seat on the board of directors, something he turned down when he realized that this would prevent him from taking more than 14.9% of the company.
After a few days in which Twitter made moves against the purchase, activating the “poison pill” mechanism to prevent him from buying the company by issuing more shares and diluting his stake, they have finally accepted the offer.
Changes in Twitter
Parag Agrawal, Twitter’s CEO, said, “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Mr. Musk. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
We’ll have to see what those changes are. As a regular Twitter user, he has often criticized the lack of a button to edit tweets, something that the company announced a few weeks ago that they were working on it, but he has also mentioned on occasion that he would eliminate Twitter Blue ads and lower the price to subscribe to the premium service, in addition to criticizing the social network’s moderation system.
Elon Musk’s money problem
Musk’s problem is common among those who populate the Forbes list of the world’s billionaires: their wealth is very illiquid. And it is concentrated in shares of companies they founded and control.
It would be relatively easy for Musk to get rid of the shares he owns, we are not talking about liquidity like the rest of the mortals. We are talking about the fact that if he were to sell his shares he would lose control of the companies. Therefore, it is not logical for Musk to sell shares of Telsa or SpaceX to buy Twitter, because he could lose his decision-making capacity within them.
It is therefore very common for these super-rich to get into debt by putting their shares as collateral to have liquidity for the day to day. In this case, Elon Musk’s day-to-day business is to buy Twitter.
According to the Financial Times, half of the money Musk has is cash. The rest are bank loans, some backed by Tesla shares, some not.