This is the great battle shaking Silicon Valley. after having acquired 9.2% of the capital of Twitter In early April, Elon Musk launched an unsolicited takeover bid to try to take over the social network, promising to become the champion of free speech. While Twitter is expected to officially reject its proposal by the end of the month, the company passed it on Friday a “poison pill” intended to thwart the Tesla boss’s offensive. Will Elon Musk raise his offer? Can Twitter Find a White Knight? The outcome remains uncertain and leaves no one indifferent.
Why does Elon Musk want to buy Twitter?
“I invested in Twitter because I believe in its potential to be the planetary platform for free speech (…), which is a societal imperative for a democracy to function,” Elon Musk wrote in a statement. his letter to the stock exchange authorities† According to him, Twitter is a prisoner of Wall Street and short-term commitments, and must be “turned into a private company”. During an interview on the TED stage in Vancouver last week, he assured that his goal was “not to make money”, but to ensure that Twitter could play its role as a “public place where one can speak freely within the community.” limits of the law”. †
Why doesn’t Twitter welcome it with open arms?
As is often the case with Elon Musk, everything can change very quickly. Twitter and its new boss, Parag Agrawal, initially offered a seat on its board of directors to whoever that is became the largest shareholder individual. But Elon Musk finally announced he would not be joining the… plate†
He then offered to buy all of Twitter’s stock for $54.20 (the number 420, pronounced “twenty-four”, is the symbol of cannabis in the United States and a recurring joke by Elon Musk), giving the network is valued at $43.4 billion. An 18% premium to last Wednesday’s closing price is far from stunning, rejected most notably by Saudi Prince Al-Walid Ben Talal, who owns about 5% of Twitter. In addition to a fair-war agreement, there are “philosophical differences” between Twitter and Elon Musk, analysts at Mizuho Securities write in a note.
What is the “poison pill” adopted by Twitter?
Twitter, which will present its quarterly results on April 28, has not yet officially responded. But on Friday, the company adopted a “poison pill” intended to prevent — or at least complicate — a hostile takeover. Under this clause, if Elon Musk or any other investor exceeds the 15% share capital bar, the rest of the shareholders will be able to purchase newly issued shares at a discounted price. So, this would dilute Elon Musk’s share, preventing him from getting a majority of the titles unless he broke the bank.
What are the reactions to Elon Musk’s coup?
Unsurprisingly, the web is being cut in half. Elon Musk can count on his fan club, especially podcaster Joe Rogan or crypto investor Cameron Winklevoss – sworn enemy of Mark Zuckerberg at Harvard. Musk, who describes himself as an “absolutist” of free speech, believes the platforms have gone too far by posing as arbiters of disinformation, with a moderation he says drifts toward “censorship” that culminated in the ouster of Donald Trump.
But for many, the idea of handing over the network and its 217 million daily users to a boss who uses Twitter himself to troll or attack enemies goes bad. “Let’s hope Elon Musk’s offer doesn’t win,” writes the editors of the Washington Post in an editorial. To avoid returning to a time when Twitter “could be exploited to manipulate elections, spread misinformation or harass internet users in packs”. And there are, like the accountant Francine McKennan, implicitly accusing Elon Musk of attempting to manipulate Twitter’s share price. In 2018, he had already been reprimanded by claiming – wrongly – to have secured the necessary private funds to take Tesla off the stock market†
Can Twitter Find a White Knight?
The social network, which struggles to make money, has fueled jealousy for years. Faced with Elon Musk’s offensive, his rescue could come from a white knight who makes a better offer to shareholders. A takeover by a tech giant seems unlikely these days, as competition authorities want to avoid mistakes of the past, such as letting Facebook buy WhatsApp and Instagram. But according to the financial channel CNBC, private equity firm Thoma Bravo is reportedly considering making an offer. In contrast, the giant Apollo Global Management could support a takeover — of Elon Musk or another party — by providing equity or debt, the authorities say. New York Times and the Wall Street Journal† The great maneuvers have only just begun.
