Musk "forced the palace" Twitter, quoting $43 billion for "freedom of speech"?

With a $43 billion offer to buy Twitter, Musk is once again in the spotlight of major media. Following This week's announcement that Musk "accidentally" refused to join Twitter's board, the world's richest man's "forced palace" drama on the veteran social media was officially staged.

Twitter discusses a "block" scenario

A document filed by Twitter to the U.S. Securities and Exchange Commission (SEC) shows that Musk proposed to buy Twitter at $54.20 per share in cash on the 13th and take it private, and the transaction amount will reach $43 billion. Based on Twitter's closing price of $45.85 on U.S. stocks on Wednesday, the acquisition premium was 18%.

Musk said he previously invested in Twitter because he believed in Twitter's potential and saw it as a social responsibility. But since investing, he realized that the company would neither thrive nor serve societal needs responsibly, "so Twitter needs to transform into a private company."

A Twitter spokesperson said on the 14th that the board of directors will carefully consider this and make a decision that is most in line with the interests of the company and shareholders.

There are many sources that Twitter will most likely not accept Musk's acquisition plan, and the board is discussing a variety of options on "how to stop Musk".

According to anonymous sources, one of the methods is to enable the "poison pill defense" strategy. The strategy, also known as "equity dilution anti-takeover measures," which allows existing shareholders of the company to buy large numbers of shares in the company at a discounted price, thereby diluting the acquirer's equity, is a common strategy used by U.S. companies to resist hostile takeovers.

Another option for Twitter is to declare musk too low a bid. As one of The major shareholders of Twitter, Saudi Prince Al Waleed bin Talal said on the 14th that due to the good growth prospects of Twitter, Musk's offer is lower than the intrinsic value of Twitter. Some Wall Street analysts also believe that Musk will have to at least make $60 a share to win Twitter.

In addition, Twitter can also solicit acquisition intentions from other companies, but it is unclear whether there are companies to approach. Some analysts said that some large technology companies interested in social media may "buy", such as Microsoft and Oracle. However, some insiders believe that this is unlikely given the premium risk.

For now, Wall Street is skeptical about whether Musk can "eat" Twitter. The analysis believes that Musk's acquisition method is simple and rude, "either take it or give up", but this Buffett-style strategy may not work on Twitter, and Musk also needs a sufficiently attractive offer and more financing details.

Although the world's richest man, Musk doesn't have many liquid assets and may need to sell some of his Tesla stock to raise cash for the acquisition.

After the news of the acquisition was made public, Twitter rose sharply before the session, rising 16.9% at one point, but then the gains fell back, closing down 1.68% on the 14th.

Why acquisition?

In just two weeks, Musk's entanglement with Twitter has been reversed several times.

Last week, Musk was exposed as holding a 9.2 percent stake in Twitter, after which Twitter said it would appoint Musk to the company's board. At the time, Musk said he looked forward to going hand in hand with Twitter. Who expected that on Monday, Twitter also said that Musk refused to "join the club".

Although musk's decision was taken as a surprise, it was not without a trace.

Musk's longstanding criticism of Twitter was direct and harsh. He has repeatedly wanted to change the social media and said he would "seriously consider" building a new social media platform. Musk, on the other hand, has never liked his company being publicly traded, and going private could reduce unnecessary regulation.

Some analysts believe that Musk is expected to use the acquisition of Twitter to become an elite club of global social networks, thereby changing the global social media landscape. With cutting-edge technologies such as meta-universe and blockchain entering the market, Zuckerberg has renamed Facebook "Meta", and the outside world is curious about whether "tech maniac" Musk will inject new vitality into social networks.

THE CONSUMER NEWS AND BUSINESS CHANNEL (CNBC) OFFERS ANOTHER PERSPECTIVE: If the acquisition succeeds, Musk will run three large companies at the same time — Tesla, SpaceX, and Twitter. Moreover, the market capitalization of the first two has exceeded trillions of dollars.

There is also the view that Musk, who runs Twitter, may repeat "Citizen Kane" in the digital age. Based on the 19th-century newspaper magnate William Randolph Hearst, the documentary film tells the story of his legendary life of using the media to advance personal agendas and incite international events.

Musk said at an event in Vancouver on the 14th that the acquisition of Twitter is not to make money, and he is not sure whether he can successfully acquire it, and stressed that his intention is to retain "the largest number of shareholders within the scope of the law", rather than one person alone owning all of Twitter's equity. Musk also said that if the acquisition fails, he still has Plan B, but did not elaborate further on the details of the plan.

Creating a "Free Speech Arena"?

While there is still a lot of uncertainty, many people are already wondering where Musk, who once said that "Twitter is dead", wants to take the veteran social media to.

The New York Times said Musk's acquisition of Twitter could have a huge impact on the global political discourse environment, as Musk is an "absolute follower of free speech." Reuters also said Musk intends to make Twitter a "gladiatorial arena for free speech."

Although there is no clear reform plan, Musk recently said privately that if the acquisition is successful, he intends to ease Twitter's restriction policy on controversial content and let users "speak freely within the legal framework." He has also previously argued that large social media platforms should "delegate power to users."

However, this will undoubtedly be a difficult path.

Twitter now has 217 million users, including some of the world's top politicians, lawmakers and celebrities. There are also great regulatory risks behind the huge traffic. Musk himself was fined $40 million by the SEC for tweeting "Tesla privatization" remarks.

In recent years, social media, including Twitter and Facebook, have faced the dilemma of tightening regulations, and there is a lot of controversy about how Twitter handles violent speech, disinformation, privacy protection and other issues. To this end, Twitter has taken measures such as deleting posts and banning words, the most famous of which is former US President Trump, who was permanently suspended because of the "1.6 Congressional Riots".

For now, Musk's acquisition decision is backed by some conservative politicians in Washington, but it has also raised regulatory concerns. Max Boot, a commentator for the Washington Post, said Musk's acquisition of Twitter could have a negative impact on society and politics.

Wall Street worries whether free speech can boost Twitter's ability to generate revenue or put it in opposition to the company's value.

Under great uncertainty, twitter has seen "civil unrest." Many employees questioned the company's senior management how to preserve the company's culture and employees' equity incentives once Twitter was acquired.

More people are worried about where Twitter is headed in the future. One employee likened Twitter's current situation to Musk's "hostage," suggesting that Twitter had lost the initiative.

There are also comments that Twitter is already in the midst of a major change, after all, "unpredictable" is Musk's background. (Edit email: [email protected])