What is the secret behind Elon Musk’s success? This is one of the questions that are asked by millions of his followers worldwide. Elon Musk is one of the richest and most successful entrepreneurs in the world.
Famed as the CEO of supercar brand Tesla and rocket manufacturer SpaceX, Musk has again made news by adding another feather to his corporate cap. He announced that he is planning to buy Twitter and has struck a deal for $44 billion! So, why is he buying Twitter? How is it going to affect the present Twitter users/employees? We’ve answered all your questions in this article. Read on.
Why is Elon Musk Buying Twitter?
The world has accepted the news of Elon Musk buying Twitter with mixed reactions. While some people supported the decision wholeheartedly, some were thinking why is he buying Twitter? Well, Musk hints that it is not just for money, “I don’t care about the economics at all,” Musk said at a conference after announcing the plan for the deal. According to Musk, Twitter has “tremendous potential” to become a digital platform for free speech. He also says that free speech is vitally important for a society, especially for a functioning democracy.
By signing the deal to buy Twitter, Musk is planning to unlock its potential to become that digital platform that he’s dreamt of. Musk actually wants to “transform” the platform in a way that allows more free speech and thus, provides the users more control over what their feed should look like and what they want to see on it.
Besides, Musk might make Twitter private. However, it doesn’t make much difference between being public and privately held. The main difference might be that instead of Twitter being held by public shareholders, Musk might be the authority who will be exercising control over Twitter, including the content moderating rules.
What Will Change?
Musk’s deal to buy Twitter, if it happens, will bring a lot of changes to the platform. Apart from turning it into a platform for free speech, Musk has several other plans in mind. Given below are a few of those changes that could happen;
- Changes in Algorithm – Twitter is an open-source digital platform up to a point. Some of Twitter’s tech is available for the public for viewing and has even changing it to a certain extent. Musk believes that it should be more open source. As a reason, he said, “there’s no sort of behind-the-scenes manipulation, either algorithmically or manually.” He believes that by doing this, the public can unlock Twitter’s full potential.
- Removing spam bots – Fake accounts have always been there on Twitter. Most of these accounts relentlessly tweet unhelpful or misleading content. Besides, there are automated accounts or spam bots, that are specifically created to send spam to a group of profiles on online social media platforms like Twitter. According to Musk, spam bots are one of the most annoying problems on Twitter. While the plan for buying Twitter was announced, Musk promised to remove the spam bots once the deal is fixed.
- New edit button – Twitter users have been asking for an edit button for years. Musk, on his Twitter feed, asked whether the users need an edit option or not, for which Twitter users obviously said yes! Musk supports adding an edit button on Twitter. Having an edit function lets the users fix, and change whatever they’ve tweeted or at the very least, lets them change the basic spelling errors or mistaken links just after tweeting it. As a response, it is revealed that Twitter has been working on the functionality for the same for quite some time.
- Payments – Twitter is free to use for all users now. However, Musk hints that the commercial users and the government accounts might have to pay a price tag for tweets. On his official Twitter handle, he’d hinted that though the platform will be free for the ordinary tweeps, that’ll be different for commercial/government users.
How Much Did Musk Pay for the Deal?
Elon Musk has come to an agreement to buy Twitter for around $44 billion in April this year. This is because Twitter’s board had agreed to sell the company to Musk for $54.20 a share, which is 38 percent more than the company’s share price this month. Musk also revealed that he is the firm’s sole largest shareholder. Once he acquires Twitter, it would be the largest deal to take a company private.
Musk Sells Tesla Shares
While the news of Elon Musk’s deal on buying Twitter spread like a wildfire, there was also another news that created speculations in the minds of the public. It was about Elon Musk selling around $8.5bn (£6.8bn) worth of shares in the electric car maker Tesla. He sold them just days after he struck a deal with Twitter.
Because the sale of stocks was done after the Twitter deal, it has led to speculation that it will help Musk finance his deal of buying the social media platform. Besides, the shares in Tesla fell sharply recently, amid speculation that he might sell part of his shares in Tesla to fund the Twitter deal.
However, later he tweeted that he had no plans to sell any more of his shares in the Tesla company. He still owns more than 15% shares of the company. Also, this sale of shares was his first sale of Tesla shares since he offloaded $16.4bn worth of stock in the months of November and December last year.
The Twitter deal was going smoothly, and the public was eagerly waiting to witness Musk’s reign on Twitter. However, on May 17, 2022, Musk raised a concern that 20 percent of Twitter accounts are fake. He also claimed that his offer was devised based on Twitter’s subscriber count being accurate, and he won’t move forward with the deal unless there was proof that only five percent of accounts are fake.
However, the public received the news skeptically. This is because according to the media, his offer was never about the total subscribers or the monetary aspects of the deal. Instead, it is said that Musk’s move was primarily aimed at changing Twitter to a platform for free speech. Hence, he never made his calculations according to the price per subscriber or something else!
Timeline of Twitter-Musk Deal
- March 2022 – Twitter names Musk as an active user.
- March 26 – Musk spoke to Jack Dorsey about the future direction of social media. Also discloses he bought more than 5% of Twitter shares.
- April 2 – The Corporate Governance Committee of Twitter recommended Musk as a member owing to his interest in Twitter’s business.
- April 3 – Twitter’s board of members considered the committee’s recommendation and the “potential for adverse impacts on stockholder value”.
- April 4 – Musk disclosed that he owned about 9.2% of the Twitter stock.
- April 5 – Twitter officially announced Musk as a member of the Twitter board.
- April 9 -Musk rejected the membership and suggested he would make an offer to take Twitter Private.
- April 12 – After the offer, Twitter’s board discussed the potential impact of Musk’s plan with lawyers and financial advisors and discussed the shareholder rights plan for the first time.
- April 13 – Musk sends an acquisition offer to the chairman of the Twitter board, offering to buy the company at $54.20 per share— which converts to about $44 billion in whole.
- April 15 – Twitter asks for time to consider the deal.
- April 21 – Musk announced that got $46.5 billion in financing for the acquisition. This was the first real assurance that he’d given.
- April 23 – Musk makes it clear that the offer is final and best.
- April 24 – The Twitter board discussed the offer concerning the broader stock market, which dropped ridiculously after the offer announcement.
- April 25 – Twitter accepts the deal and negotiates some terms of the agreement.
- May 4 – Musk gets $6.25 billion in investment from third parties since he couldn’t buy Twitter without selling Tesla stocks.
- May 13 – Musk tweets that the deal is on hold.
The news of Elon Musk buying Twitter spread like a wildfire all around the globe through the media. However, the deal is not yet confirmed officially. His history with the Twitter acquisition was chaotic so far and what holds for him and Twitter in the future, is still a mystery that we have to wait and witness!
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