Elon Musk buys Twitter: All the pieces you want to know | Siege Tech

After months of controversy and negotiation, it is official: Elon Musk of Tesla and Starlink now owns Twitter. The deal, valued at $44 billion, represents the biggest social media buy since Fb acquired WhatsApp in 2014. Nevertheless, as a public social community, many speculate that Twitter might bear some drastic modifications beneath Musk’s possession. This is all the pieces you want to know concerning the phrases of the deal and the way Twitter might change sooner or later.

Earlier than Elon Musk purchased it, Twitter was a public firm listed on the New York Inventory Trade. For the reason that firm went public in 2013, particular person and institutional traders have been capable of purchase firm shares on the open market. Actually, Musk already purchased a 9.2% stake in Twitter earlier than making a proposal to purchase your entire firm and take it non-public.

Musk’s 9.2% stake was sufficient to ensure a seat on the board of administrators. It additionally made Musk the corporate’s largest single shareholder, dwarfing even Twitter founder Jack Dorsey’s 2% stake.

Nevertheless, the sub-10% turnout was not sufficient to make choices on Twitter and Musk must persuade different board members to aspect with him. Twitter additionally prevented him from buying greater than 14.9% of the corporate throughout his tenure on the board, till 2024. In all probability resulting from these two elements, Musk turned down the board place and made a proposal to purchase your entire firm. the corporate.

In April 2022, Musk provided to purchase Twitter outright for $44 billion in money. That labored out to $54.20 a share, a big premium over the inventory worth on the time. In different phrases, present traders would obtain a 38% increased money payout if Musk’s provide had been accredited quite than promoting the shares on the open market. After some preliminary misgivings about Musk’s capability to safe funding, Twitter’s board of administrators accepted the takeover provide. The corporate stated: “The proposed transaction will generate a considerable money premium, and we imagine it’s the finest path ahead for Twitter shareholders.”

As for the financing, Reuters stories that Musk used a mix of fairness and debt financing to shut the $44 billion deal. He additionally bought greater than $15.5 billion value of Tesla inventory since April, giving him sufficient capital to repay greater than $27 billion of his private belongings. Musk then approached banks for one more $13 billion in loans, with Morgan Stanley contributing an estimated $3.5 billion to the trigger. The ultimate $5.2 billion got here from varied funding teams. This included enterprise capital corporations like Sequoia Capital, holding corporations like Qatar Holding, cryptocurrency trade Binance, and particular person traders like Saudi Arabia’s Prince Alwaleed bin Talal.

Elon Musk’s need to personal Twitter stems from his personal use of the platform. Musk is an everyday on Twitter and with greater than 111 million followers, he owns the third most adopted account on the web site.

But regardless of his affinity for the platform, Elon Musk has been a vocal critic of Twitter. From content material moderation to income era, he criticized a lot of Twitter’s insurance policies within the months main as much as the change in possession, often within the type of tweets.

Musk additionally complained about spam and bot accounts on the platform. Days after the provide to purchase him, Musk fiance to take away these accounts and authenticate reliable accounts in case your provide was accredited. Nevertheless, it didn’t finish there. A couple of weeks later, Musk tweeted about placing the deal “on maintain” and demanded that Twitter administration present proof that solely 5% of accounts had been spam or bot accounts. The talk dragged on for months, just for Musk to lastly relent and purchase Twitter beneath the phrases of the unique settlement.

Musk additionally criticized Twitter’s administration’s present content material moderation coverage, which he claims has unfairly silenced sure political pursuits and jeopardized freedom of expression on the platform. Musk said that “Twitter is the sq. of the digital metropolis the place important points for the way forward for humanity are debated.” Below his possession, Musk stated he hopes Twitter will cease issuing everlasting bans and permit “authorized freedom of speech” to stay on the platform.

Now that Elon Musk has accomplished the deal and owns Twitter, present shareholders will obtain their cost of $54.2 per share. After that, they’ll haven’t any say within the day-to-day affairs or general path of the platform, as they haven’t any stake within the firm. 98% of shareholders voted in favor of accepting the provide.

As for the destiny of Twitter, it’s a little much less clear. Musk has already made some huge strikes after taking up the corporate.

On his first day, Musk tweeted, “The chook is free,” a nod to each the Twitter emblem and its criticism of the platform’s restrictions. He then went on to fireside the corporate’s CEO, CFO and common counsel. The latter, Vijaya Gadde, was additionally the corporate’s chief coverage officer and is believed to have been accountable for suspending former US President Donald Trump’s Twitter account.

Sooner or later, Elon Musk stated he hopes to generate extra income and make Twitter much less reliant on promoting. In a pre-sale presentation, Musk outlined particular objectives, equivalent to rising income from $5 billion to $26.8 billion by 2028 and chopping reliance on promoting income in half. Musk additionally plans to introduce monetization options for bigger accounts and develop the corporate’s funds enterprise to generate $1.3 billion by 2028. That is unprecedented, as Elon Musk co-founded PayPal and was the corporate’s CEO till 2000. Twitter at the moment solely permits customers to tip one another utilizing cryptocurrencies.

As for Twitter’s content material moderation, researchers and social media consultants have raised fears about Musk’s objective of stress-free insurance policies. They warn that the platform may very well be invaded by hate speech, trolling and misinformation beneath the guise of freedom of expression. The CEO of Tesla and SpaceX has not addressed these considerations instantly. Nevertheless, in a cheep to Twitter advertisers, Musk vowed he wouldn’t enable the platform to grow to be a “free-for-all hell, the place you may say something with out consequence.”

Finally, Musk says he desires to create a curated expertise on Twitter the place customers can select the content material they need to see. That may very well be one thing like TikTok, which tailors customers’ feeds to their preferences, or one thing else completely. Solely time will inform.

In the long term, Elon Musk stated shopping for Twitter was simply step one in a bigger plan to construct X, an “app for all the pieces.” Once more, it isn’t clear if this concept will match into present tremendous apps like WeChat and Seize. In Asia, these particular person apps are generally used for messaging, funds, buying, meals supply, experience sharing, and extra. A leaked transcript of Musk’s city corridor assembly with Twitter employees revealed that he not less than sees WeChat as a supply of inspiration for the platform’s future. In response to his pitch deck, Musk hopes to have greater than 100 million X customers by 2028.