Tag Archives: Elon Musk

Elon Musk Said His Twitter Deal is “On Hold”

Elon Musk said his planned acquisition of Twitter Inc. was “temporarily on hold” because of concerns about fake accounts, a surprise twist that jolted investors and raised questions about his willingness to go through with the $44 billion transaction, The Wall Street Journal reported.

According to The Wall Street Journal, Mr. Musk’s “grenade” came in a tweet posted at 5:44 a.m. Eastern Time that was followed just over two hours later by another saying he was “still committed to acquisition.” Lawyers close to Mr. Musk urged him to send that follow-up tweet, according to people familiar with the matter.

The Wall Street Journal also reported that the initial announcement was unorthodox not just in its timing and format, but because Mr. Musk referenced a recent Twitter disclosure about fake and spam accounts that it has made consistently for years – and because Mr. Musk has already signed an agreement for the purchase and waived detailed due diligence on the deal.

The Washington Post reported that Elon Musk’s declaration cast fresh doubt on the seriousness of his offer just as he was scrambling to find new investors to help him fund the deal. It also played into his hand by sending Twitter’s stock price tumbling, though the tweet had the potential to draw regulatory scrutiny.

According to The Washington Post: Spam bots, accounts that peddle cryptocurrency scams and otherwise seek to exploit vulnerable users, have long been a pet peeve of the technology mogul who regularly encounters impersonators in his activity on site.

Axios reported: For Musk to liquidate a significant amount of Tesla stake and to wrangle bankers into giving him billions of dollars in financing, only to backtrack due to a single [Reuters] article, shows how manic the entire takeover process has been.

The New York Times referenced Elon Musk’s contradictory tweets, and reported: The seemingly contradictory messages left many wondering whether Mr. Musk was getting cold feet, trying to drive down the acquisition price or looking for a bit of attention. Perhaps it was some combination of the three. Twitter’s stock yo-yoed in response to his posts.

Personally, I cannot even begin to guess what, exactly, Elon Musk is trying to do. Maybe he doesn’t know, either. It seems that having more money than most people will ever see in their lifetime gives Elon Musk the leverage to play with the rules. I’ll leave it to regulators to determine if he’s crossed the line.

Twitter Accepts Elon Musk’s Buyout Deal

If you have spent any time on Twitter today, you may have noticed that Elon Musk has bought the platform. This news was posted in a press release titled: “Elon Musk to Acquire Twitter”.

From the press release:

Twitter Inc., today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completing of the transaction, Twitter will become a privately held company.

Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter.

The press release also includes a quote from Elon Musk: “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.”

CNBC reported that Twitter would become a private company on completion of the deal, which requires shareholder and regulatory approval.

CNBC also reported: Assuming the deal closes and Musk takes ownership of Twitter, the company will be controlled by the world’s richest person and someone who’s been a heavy critic of the platform while using it in legally contentious ways, mostly through sensitive posts about his car manufacturer, Tesla.

In addition, CNBC reported: Though Musk has indicated that his primary interest in Twitter has to do with what he views as the company’s censorship of free speech, Musk critics are concerned that the billionaire’s control over the platform will result in the silencing of voices and others with whom he may disagree, given that he’s often blocked critics from his personal account.

I spent some time on Twitter reading tweets about Musk’s buyout. A few people announced that they would be leaving Twitter (with some wanting to delete their tweets first). Many people posted tweets indicating that they believed that there would soon be no moderating of Twitter whatsoever. Some of that group decided to make snarky tweets about people who don’t match their own, personal, political views.

As for me, I’m going to wait and see what happens.

Twitter Board Adopts Limited Shareholder Rights Plan

Twitter logoFollowing Elon Musk’s offer to buy Twitter and make it a private company, Twitter’s Board of Directors enacted what has been referred to as a “poison pill”. It is my understanding that this decision is something the Board is allowed to do.

Axios reported that the “poison pill” is a corporate term that gives, in this case, Twitter’s existing shareholders time to purchase additional shares at a discount, thus diluting Elon Musk’s ownership stake. The move is designed to make it difficult for anyone, including Elon Musk, to build a stake worth more than 15% of the company.

PR Newswire posted a press release from Twitter’s Board of Directors. It is titled: “Twitter Adopts Limited Duration Shareholder Rights Plan, Enabling All Shareholders to Realize Full Value of Company”.

The wording the press release starts with includes: The Board adopted the Rights Plan following an unsolicited, non-binding proposal to acquire Twitter.

The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. The Rights Plan will reduce the likelihood that any entity, person, or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgements and take actions that are in the best interests of shareholders.

CNBC reported that if any person or group acquires beneficial ownership of at least 15% of Twitter’s outstanding common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount. The move is a common way to fend off a potential hostile takeover by diluting the stake of the entity eying the takeover.

According to CNBC, if Elon Musk would have joined Twitter’s Board of Directors, he would not have been allowed to accumulate more than 14.9% of beneficial ownership of the company’s outstanding common stock.

The press release states that the Rights Plan does not prevent Twitter’s Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interest of Twitter and its shareholders. To me, that wording makes it clear that Twitter’s Board does not consider Elon Musk’s offer to be beneficial.

Elon Musk Wants to Make Twitter Private

Twitter logoElon Musk has offered to take Twitter Inc. private in a deal valued at $43 billion, lambasting company management and saying he’s the person who can unlock the “extraordinary potential” of a communication platform used daily by more than 200 million people, Bloomberg reported.

According to Bloomberg, Elon Musk said he will pay $54.20 per share in cash, 38% above the price on April 1, the last trading day before Musk went public with his stake. Twitter’s company shares were “little changed” at $45.81 on Thursday, “a sign there’s skepticism that one of the platform’s most outspoken users will succeed in his takeover attempt.”

The Guardian reported that the $54.20 offer price includes the number 420, in what appears to be a reference to the number used as code for cannabis. The Guardian also noted that in 2018, when Elon Musk offered to take Tesla private he offered to buy the shares he did not already own for $420 a share.

I’m starting to wonder if Elon Musk sees this as a big joke. It is difficult to take someone seriously after they have used the number 420 in not one, but two, attempts to make a company private.

In a press release on PR Newswire, Twitter Inc. confirmed it has received an unsolicited, non-binding proposal from Elon Musk to acquire all of the Company’s outstanding common stock for $54.20 per share in cash. The press release also states: “The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interests of the Company and all Twitter stockholders.”

To me, that sounds like corporate speak for, “We aren’t interested in this offer”.

This explains why I saw the word “Censorship” in the “What’s Happening” section of Twitter earlier today. It included a wide variety of tweets about censorship – from banned books to the idea of Twitter never blocking, labeling, or suspending accounts ever again.

Personally, I don’t think Twitter Inc. is going to accept Elon Musk’s offer. But if it does, and Elon Musk gets to make the changes he wants to make, there are other options for social media. I recommend Mastodon, especially if you take the time to find an instance that fits you.