EXPLAINER: What is Musk actually doing while pointing at Twitter?
Among them: Are you serious? Will you be able to raise the money? Would a sale make shareholders happy? And what would the social platform look like if it is successful?
WHY IS MUSK INTERESTED IN TWITTER?
Apparently because the service, he says, doesn’t live up to its potential as a “platform for free speech.” Musk insists he is not interested in making money off of Twitter, saying on Thursday his motivation stemmed from the realization that “having a public platform that is highly trusted and widely inclusive is extremely important to the future of civilization.” ”.
Musk has described himself as a “free speech absolutist” but has blocked Twitter users who question or disagree with him. Regulators have also accused his auto company, Tesla, of retaliating against black workers who reported discrimination.
HAS MUSK SAID WHERE HE WILL GET THE FUNDS TO BUY TWITTER?
No. And its regulatory filing says the offering is subject to “completion of early financing.”
During an onstage interview Thursday at the TED 2022 conference, Musk vaguely noted that he has “enough assets” to complete the deal, adding, “I can do it if possible.”
CAN YOU BUY TWITTER WITH YOUR PERSONAL WEALTH?
Musk is the richest man in the world, according to Forbes, with a fortune of nearly $265 billion. But much of his money is tied up in shares of Tesla (he owns about 17% of the company, according to FactSet, which is valued at more than $1 trillion) and SpaceX, his private space company. It’s unclear how much cash Musk has.
“I think this is going to be a painful thing and I’m not sure I can actually acquire it,” Musk said in his Thursday interview.
Musk could sell Tesla shares to raise money, which could hurt Tesla’s share price, or borrow against his shares. But Forbes notes that he has already used more than half of his Tesla stake as loan collateral.
WOULD TWITTER SHAREHOLDERS BE HAPPY WITH YOUR OFFER?
The shares traded below the offer price of $54.20 a share on Thursday, suggesting investors doubt the deal will go ahead. The shares traded above $70 in the last 12 months and reached a high of $80.75 in February 2021.
There has been executive turnover since co-founder Jack Dorsey’s departure in November left Twitter with a new chief executive, Parag Agrawal, whose initial actions involved internal shakeups. There have been no major changes to Twitter, which, despite its enormous influence due to high-profile celebrity and political posters, as well as a devoted journalist base, has fewer users than social media rivals like Facebook and TikTok. . Musk himself is a huge user, with more than 81 million followers.
Dorsey, who remains a major shareholder, has not indicated what he thinks of Musk’s offer.
Twitter only said it will look into the offer. A spokesman declined to answer whether the board will implement a defense against a hostile takeover known as a “poison pill.”
HOW COULD MUSK REMAKE TWITTER?
It’s hard to tell with Musk, and even trying to figure this one out might be taking the man too seriously. By saying that Twitter doesn’t live up to its potential to be a “platform for free speech,” he seems to be saying that it would reduce content moderation. But he has also called on the company to crack down on spam accounts, which means more restraint.
He proposed removing ads from the service (ads are how Twitter makes money) and turning its San Francisco headquarters into a homeless shelter. It also seems to approve a button to edit tweets.
WHAT CONCERNS DOES MUSK RAISE YOU AS THE OWNER OF TWITTER?
Social media companies are struggling to contain disinformation and hate speech. Musk, whose tweets can lead online bullies to harass their online critics, doesn’t seem interested in content moderation.
“Regulators around the world will cringe at the potential free speech implications if Musk’s takeover bid is successful,” said Rachel Foster-Jones, an analyst at GlobalData. misinformation or discourse becomes increasingly confusing, and attempts to change Twitter could easily lead to these issues spiraling out of control.”
In his chat with Anderson, Musk said that Twitter is “bound by the laws of the country that it operates in, so obviously there are some limitations on free speech in the US, and of course Twitter would have to comply.” with those rules. he said it was “pretty dangerous” to have “mysteriously promoted and demoted tweets” and to have a “black box algorithm”.
WHAT HAPPENS NEXT?
Twitter could hire bankers and advisers to help it review the deal, said Scott Kessler, a technology, media and telecommunications analyst at Third Bridge. And other buyers could emerge. “It seems that if potential strategic and/or financial buyers are interested in Twitter, they should probably get involved now.”