Elon Musk’s takeover of Twitter could become a capitalist period drama a few decades from now. It has full potential.
We know Musk sort of took things to his ego and offered/threatened a takeover of Twitter which he ultimately executed for $44 billion in cash. God knows how he is going to do that, but one can be certain he will figure out a way.
Basically, imagine Marlon Brando, minus the cigar (or not), saying, “I’m gonna make him an offer he can’t refuse”.
I hope that even my worst critics remain on Twitter, because that is what free speech means— Elon Musk (@elonmusk) April 25, 2022
That pretty much sums up the whole thing, except it doesn’t. There was a lot of going back and forth. Twitter was not in favour of privatisation of the platform. By “Twitter” I mean the board of directors. You’d understand their concern too. When you sell something to Elon Musk, it can become better, but it almost always becomes less democratic just by the virtue of the power he holds.
That hasn’t always proven to be a bad thing, in that he has used his power to do some unimaginable stuff – but one could try to understand why the board was wary.
Now, Twitter has also been accused of not promoting free speech the way it should so they are not very clean but that’s a separate discussion.
Anyway, when Musk bought $3 billion worth of Twitter shares before writing to the board that he wants to buy the platform.
NEW – Elon Musk buys $3 billion stake (9.2%) in Twitter and is now the platform’s largest shareholder.— Disclose.tv (@disclosetv) April 4, 2022
His request was denied and the board took the ‘poison pill’. This means that they released new shares in the market in abundance, making the whole deal much more expensive for Musk. Taking a poison pill means you give your shareholders a chance to buy more stock at a discounted price, which, if they do, makes it difficult for the person looking for a takeover to acquire a big chunk. This keeps their involvement low.
However, Musk threatened that he will make a tender offer (offer to give away your shares) for the shareholders and that it will complicate things further. The board was aware that A. He could very well pull this off and B. The investors won’t be happy with this situation.
So, it looks like @elonmusk will counteract their little poison pill with a soft offer.— 🚛TraderJill (Pronouns: Meme Queen/Your Highness) (@LadyJustice6910) April 21, 2022
What does that mean? It means he’ll make a deal w/ general shareholders, and deal with one on one transactions until he takes the lion’s share of Twitter stock.
Well played, sir! Checkmate! pic.twitter.com/bCt563ang7
And so, the negotiations started and the board gave in. Now the higher-ups of Twitter face the fear of being fired as Musk announces that he is very keen to unlock the potential of the platform and promote free speech.
What happens next remains to be seen but the sheer amount of persistence on both sides has been astounding. There are few battles Musk loses, and it’s noteworthy from a business point of view but overall, scary.