Twitter was once Donald Trump’s favorite communication tool. If he wrote a short message, it could have global political consequences. And when Elon Musk tweets, it at least moves 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 of course there are many questions when someone like Tesla boss Musk, the richest person in the world, wants to buy Twitter.
After a weekend of long nights of negotiations, this has actually become a reality. Musk had presented the San Francisco-based company with a new financing offer – and that apparently convinced the Twitter board of directors to accept the acquisition and recommend the transaction to shareholders. The company announced late Monday evening that it was ready to accept the offer of $54.20 per share. After that, Twitter will be delisted.
Musk, who in addition to Tesla also founded the aerospace company Space-X, the payment service Paypal 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 financial institutions, the news service reports Bloomberg 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.
Musk wants to stand up for freedom of speech – but which ones?
In addition, the nature of the takeover Musk is aiming for does not allow access to Twitter’s books in advance. 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 initially only said that they wanted to look into the matter seriously, but then it was said – albeit unofficially – Twitter was ready to accept Musk’s offer. Finally, the news that the Twitter board recommended that shareholders accept Musk’s offer.
Before that, the managers at Twitter had 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. Elon Musk had already collected nine percent of Twitter shares in the past few months. Now, however, the pressure from other Twitter shareholders to accept the offer has clearly increased. After all, Musk’s offer is well above Twitter’s current share price.
The takeover of the platform was not only discussed because of the financial details. It is also about the importance of Twitter as a social medium. Elon Musk had announced that he wanted to stand up for freedom of speech. However, many are wondering what freedom he means by that – Musk is known for his negative attitude towards critical journalists. For example, when the Tesla plant in Grünheide near Berlin went into operation, a number of journalists who had previously expressed criticism did not receive accreditation for the celebration. Even critical inquiries to the company are often not answered or the questioners are fobbed off with phrases. And Musk also seems to be ignoring the fact that unrestrained freedom of speech on social media has also caused a lot of damage.
Investors are demanding billions – just because of a tweet
Elon Musk, who says he suffers from Asperger’s Syndrome, a mild form of autism, has worked hard to take over the social network. But he is threatened with trouble just because of 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 thing that the US Securities and Exchange Commission (SEC) had called into question at the time could now fall on his feet.
Musk and his attorneys are appealing the judge’s decision. Opinions differ, even among American legal experts, on how much 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.