Revolutionizing the social media industry has always been the long-cherished wish of Musk, the world's richest man.
Before entering Twitter, Musk had said that he wanted to start a social media company that directly competed with Twitter to change the entire industry. Although it is not known what his real intention is to enter the game, it is clear that musk's war without smoke and smoke against Twitter will not end easily.
On April 14, Tesla CEO Musk announced that he would buy Twitter for $54.20 per share. Not only that, he also declared that this was his best and final offer.
With Musk so tough, can he really achieve what he wants? If Twitter can really be privatized, can Musk transform Twitter as he wants?
I think that Musk is more likely to "say hi", just like the privatization of Tesla in the media at that time, the eventual privatization of the acquisition may be disappointed, for the following reasons:
First, as of the latest trading day, Twitter's share price was $45.08 per share, while Musk gave an offer of $54.20 per share. It is reported that Twitter's stock price has touched $73.34 / share in a year, such a "low" offer, Twitter's board of directors should be difficult to agree.
Second, Musk may not have that much cash. According to the latest data from the Bloomberg Billionaires Index, Musk has a wealth of about $259.3 billion, of which Tesla stock is worth $176.5 billion, Tesla's options are worth $56.3 billion, SpaceX equity is worth $40.3 billion, and Twitter's equity is $3.4 billion. Bloomberg estimates musk to have only about $3 billion in cash and other assets.
Assuming bloomberg's estimates are less marginal, and the Financial Times estimates that the cash acquisition of Twitter could require $43 billion( about 274.2 billion yuan), musk's current cash flow will have to sell more Tesla stock.
For Tesla, if Musk continues to sell intensively, it is very likely to "sell" Tesla.
Third, Musk may face charges and penalties. A few years ago, Musk was punished by the U.S. Securities and Exchange Commission for his remarks about taking Tesla private, and eventually settled with huge compensation.
This time, some former shareholders of Twitter have begun to sue Musk, accusing him of manipulating the stock price for improper benefits. In fact, musk began to quietly buy Twitter stock as early as March, and by March 14, his shareholding had exceeded 5% of Twitter's total share capital, and according to the relevant requirements, he had to disclose it within 10 days, and on April 4, musk held 9.2% of the shares, which was already suspected of violating the law.
Fourth, Musk's refusal to sit on Tesla's board of directors means that he has no intention of striking some sort of balance with Twitter's management, but rather wants to continue buying Twitter's shares in the market. Because according to the regulations, if Musk enters Twitter's board, then his shareholding cannot exceed 14.9% before the 2024 shareholders' meeting. But with regard to "hostile" takeovers, management and the original shareholders will not easily surrender.
At that time, Musk's acquisition process will become extremely slow, and its acquisition difficulty will be greatly enhanced.
So why did Musk make a high-profile announcement about the acquisition of Twitter?
As we all know, Musk tweets a total of more than 80 million followers, more than 17,000 posts on Twitter, in the internet age, this is a huge traffic entrance.
In the past few years, Musk's tweets have not only led to the exposure of Dogecoin and other digital currencies, but also saved Tesla a lot of advertising costs. Obviously, whether it is for Tesla or himself, it is a huge traffic entrance, which cannot be lost, because once the personal account "disappears", the loss is immeasurable.
So that's one of the main reasons Musk bought Twitter. In addition, on March 25, Musk launched a voting project that said, "Do you think Twitter abides by the principle of free speech?" ”
A total of two million users participated in the vote, and 70.4 percent believe Twitter did not follow this principle. Later, he also posted a recommendation that the purpose behind setting up identity badges, banning ads, reducing fees, and accepting Dogecoin payments for Twitter's premium subscribers is self-evident.
I think the reason why Musk cares so much about Twitter is because in the past because his remarks on digital currency have made him profitable, so in order to better "carry goods", it seems very cost-effective to "buy out" a social media. Even if he fails to achieve his goal in the end, then the large-scale acquisition will push up Twitter's stock price, and Musk can also cash out at a high level when he is high, just like Baoneng "blocked" Vanke.
Finally, I don't think Musk can successfully acquire, because it seems that under the slogan of "justice", there is actually selfishness, if this behavior is allowed, then the final buyer will be ordinary small and medium-sized investors, and Musk himself may also face punishment.