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In the harassment and takedown of Twitter, Elon Musk, the richest man in the world, the libertarian—or absolutist, for his critics—champion of freedom of expression, has used tweets as a joke, in a series of volleys typical of the bully of the kind that were about to derail the negotiation with the eleven members of the board of directors of the social network. Divo rudeness and frightened marked the process, and the risk of a fist bump on the table even planned in the early hours of Monday, hours before the agreement was announced by which the extemporaneous executive, born in South Africa and a US citizen since 2002, he was finally doing with his new and very expensive toy.
This is the reconstruction of days of frantic negotiations that had 220 million users on edge. A great business and media storm with the rhythm of a thriller that has developed in less than a month and that has concentrated all the tension in just ten days.
The initial offer. After becoming Twitter’s main shareholder in early April by acquiring 9% of the shares, Musk flirted with the possibility of joining its board of directors, inviting himself. But then he backed down, tweeting a series of expletives about the network to his more than 80 million followers, along the lines of “Twitter sucks” (he later vowed to make amends for his garrulous nature and not bring the company into disrepute with his comments). ). On the 13th, in the afternoon, he launched the big deal: his bid to buy the entire company and take it out of the stock market, for which he put on the table, in one fell swoop, 43,400 million dollars (about 40,000 million euros ). On the 14th, Thursday, the shareholders’ meeting said that it would “carefully” consider the proposal, but after a meeting of several hours the former owners stood up to the tycoon: they were not going to make it easy for him, much less cheap.
The poison pill clause. The corporate defense maneuver known in the US as poison pill It consists of avoiding a hostile takeover bid by making the target’s actions more expensive. As a shield or self-defense exercise, it is a frequent resource. This is how Twitter tried to stay safe from Musk, responding on the 15th to his purchase offer with this safeguard, valid in principle for a year, to buy time. The poison pill not only protects shareholders, it also hinders the arrival of Trojan horse partners (like Musk) willing to seize power from within. But on the afternoon of the same Thursday, the billionaire already warned that he had a plan B to save the stumbling block. The psychological factor of the war of nerves began to paralyze the adversary.
Financing first. Although his original offer was sketchy and met with skepticism on Wall Street, Musk moved quickly to secure $46.5 billion worth of endorsements to finance it, while pressing Twitter management to take his advances seriously. On Thursday the 21st, a week after the poison pill clause was activated, the owner of Tesla revealed that he had filed documents the day before with the Securities and Exchange Commission (SEC, the US stock market regulator) showing the seriousness of its purpose: a combination of debt and cash. Investment bank Morgan Stanley and a group of lenders backed him with $13 billion in financing and another $12.5 billion in loans against his shares in Tesla. To this was added another 21,000 million whose origin would be less clear, and it was speculated that they could force the tycoon to sell part of his stake in Tesla to obtain them. Financial cards on the table added pressure to Twitter’s leadership.
Addendum: After the deal closed, Musk this week sold Tesla shares worth about $8.5 billion to raise cash. He assures that it will be the last package he gets rid of, which has hardly reassured the shareholders of the electric car manufacturer, which since the beginning of April, when Musk began the assault on Twitter, has lost 20% of its value on the stock market.
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The agreement kitchen. With the funding clearer, the Twitter leadership capitulated during a meeting held on the morning of Sunday the 24th; subsequently, he locked himself in a room with Musk to seal the deal. The agreement was announced in the early hours of Monday the 25th, but even that morning he planned the threat of a blow to the table, according to sources close to the negotiation. The San Francisco company accepted the offer of $54.20 per share. Both parties also negotiated a formalization schedule and the compensation to be received if the fickle and visceral Musk turned back, once again. Even before the deal was officially announced, Twitter shares opened 4% higher on Monday, at nearly $51 a share.
Immediate future. Shareholders will decide on the offer in a vote; It will also be evaluated by regulators to determine if it poses a threat to free competition and consumer rights, although in principle it is ruled out that they could block the operation. The billionaire amount of the same implies submitting it to the evaluation of the Department of Justice and the Federal Trade Commission, the two instances that regulate business acquisitions. The deal is expected to take three to six months to close. In the meantime, scrutiny seems likely to be intense — including in the virtual public square that is Twitter, with acrimonious supporters and detractors of the operation — and many questions remain about Musk’s plans for the company, especially regarding to the liberalization of content controls and the lively own life of the algorithms.
One key factor: unpredictability. Musk’s fickle character doesn’t help. The gap between Twitter’s share price and what Tesla’s fickle co-founder is offering has widened since Monday. Participants in the transaction are concerned about the billionaire’s financing plan and his commitment to complete the transaction, although Tesla’s stock sale announcement should help calm the waters somewhat. There is no lack of those who think that the deal could still collapse, especially in the face of the effort to always have the leading voice of whom some consider “the problematic boyfriend that Twitter deserves.” A newspaper stand New York Times recalled on Friday how at his first wedding, in 2000, Musk told his wife during the wedding dance: “I am the alpha in this relationship.” That’s how it is already in Tesla, and it wants to be now on Twitter.
Spoiler (open ending): Musk’s stranglehold on Twitter could have serious implications for political discourse around the world, relaxing the company’s moderation policies, as well as further stirring up the free speech debate in the US at a time of polarization. extreme (already six months away from decisive elections). Many tweeters are already seeing Donald Trump return through the front door, although for now, in the week zero of the operation, it seems that the moderation mechanism is still in force, as the case of Roger Stone demonstrates. Trump’s close friend, who tried to return to Twitter this Thursday, had been permanently banned in 2017. His new account lasted only a few hours before a new deadbolt. The liberator Musk now has the floor.
Twitter exaggerated its number of active users
On Thursday, Twitter admitted that it had “accidentally” overrepresented the number of monetizable daily active users between 2019 and 2021, thanks to a feature that allows any user to link multiple separate accounts. During those three years, he accounted for the linked accounts as if they were individual, the Axios portal reported this week. This is not the first time Twitter has admitted to exaggerating its customer base; it also did so in 2017, relative to the number of users in the previous three years. So the criticisms about the management of the company that Musk throws in the trills -and that have been one more tactic of his conquest strategy- could have, in view of these data, some basis, but that has not calmed the market either. not the tweeters. Twitter recorded 1.2 billion dollars in revenue in the first quarter of the year (16% more than in the same period of 2021, but below the 20% expected), while expanding its audience to 227 million active daily users, 16% more than a year ago but much less than Facebook, for example. The results represent a bittersweet message, almost as ambivalent as Musk himself.
