Twitter was Donald Trump’s favorite communication tool. If he wrote a short message, it could have global political consequences. But even if Elon Musk sends a tweet, it will at least move the financial markets. So it’s clear that Twitter, the platform for short messages, videos and live debates, has more than just economic importance. And it’s also clear that there are many questions when someone like Tesla boss Musk, the richest person in the world, wants to take over Twitter.
This became a bit more likely again over the weekend – Musk presented the San Francisco-headquartered company with a new financing offer. And apparently, Twitter is no longer quite so averse to accepting the offer. One is ready to accept the offer in the amount of 54.20 dollars per share, writes Reuters. A deal could be announced later Monday. Both parties entered into negotiations last night.
Musk, who also founded the aerospace company Space-X, the PayPal payment service and several other companies, had publicly claimed that the economic side of Twitter was not important to him. But he first had to raise the roughly $43 billion needed to take over the social network. His gigantic fortune of around 250 billion dollars consists mainly of Tesla shares. As American media reports, there have been hectic activities in the past week to get the money from banks, apparently with success.
Musk’s vision of how he wants to run Twitter and make it profitable has been well received by the financial institutions, reports the Bloomberg news service, citing confidential discussions with some of the bankers. Musk’s people showed presentations, Musk also communicated with some of the larger potential investors via video chat and was very enthusiastic. The major bank Morgan Stanley is said to have played a leading role not only as the first lender, but also in getting other banks such as Société Générale, BNP Paribas and Barclays on board. But for some, things went a little too fast.
Twitter wants to check the offer
In addition, the nature of the acquisition Musk is seeking does not allow access to Twitter’s books. So the financiers had little more than the publicly available information and the plans presented by Musk to decide whether to participate or not. The Twitter board has so far only announced that they want to look into the matter seriously. This Thursday is the company’s quarterly conference call.
Twitter had previously rejected the deal and taken countermeasures to make it more difficult for Musk to buy more shares. They allowed other shareholders to buy Twitter shares at a discount if a shareholder’s stake exceeded 15 percent. In technical jargon one speaks of poison pill, in German: poison pill. Elon Musk had already bought nine percent of Twitter shares in the past few months.
The planned takeover of Twitter is not only being discussed because of the financial details. It is also about the importance of the platform as a social medium. Elon Musk had announced that he wanted to stand up for freedom of speech. However, many wonder what freedom he means by that. Musk is known for his dismissive attitude towards critical journalists. When the Tesla plant in Grünheide near Berlin went into operation, a number of journalists who had previously expressed criticism were not given accreditation for the celebration. Even critical inquiries to the company are often not answered or the questioners are fobbed off with phrases – similar to what is known from other US tech companies.
Trouble in court threatens
Elon Musk, who says he suffers from Asperger’s syndrome, a mild form of autism, is working hard to take over the social network. It is still unclear whether he will succeed. But he is threatened with trouble from an earlier tweet. Last week, a San Francisco judge found that one of the 2018 text messages in which Musk claimed he was planning to delist his electric car company Tesla was a lie. Musk denies that.
The notorious tweet with the content “funding secured” (financing secured) had caused the Tesla share to rise sharply – some investors had lost a lot of money because of it. The San Francisco judge’s decision came in one of at least 12 high-profile cases surrounding those tweets. The matter, which the Securities and Exchange Commission (SEC) had called into action at the time, could now fall on his feet.
Musk and his attorneys are appealing the judge’s decision. “Nothing will ever change the truth that Elon Musk considered taking Tesla public and could have done so,” Musk’s attorney, Alex Spiro, told Bloomberg. Opinions differ, even among American legal experts, on the extent to which the matter will harm him. In any case, it is interesting that Musk was actually obliged to submit every tweet that had to do with Tesla to an internal employee, the so-called Twitter sitter, before it was published.
Investors have filed a lawsuit against Musk over Musk’s allegations, which is due to be heard next January, with losses of $12 billion. Nicholas Porritt, the lawyer for the other side, sees a good chance. It is very rare for the judge responsible to discredit an accused in this way before the start of the hearing, and especially not in such a large case.