Wen | Wentian
Editor | asked
"Iron Man" Elon Musk made headlines again, with a April 14 announcement offering to buy social media Twitter for $54.20 per share in cash.
Based on this calculation, Twitter's acquisition is valued at more than $43 billion (about 274 billion yuan). That's 38 percent higher than the price on April 1 when Musk officially invested; it's 54 percent higher than the day before he started investing in Twitter.
As the male protagonist of the most talked about commercial suspense series on the planet. From SpaceX carrying a Tesla Roadster sports car to rush into space, Shanghai to open a factory to get out of the Modle3 production capacity quagmire, to the show to smoke marijuana a face with a raised eyebrow and a mouth to brush the screen network, for Bitcoin / Dogecoin endorsement, what ordinary people see is that as a show-loving CEO of a listed company, Qingqi's brain circuit is always accompanied by death and life.
"Twitter needs to transform into a private company." Waving a check and opening the acquisition model, this is Musk's attack.
But Twitter apparently won't easily surrender, with an official statement:
Twitter's Board of Directors has unanimously approved a shareholders' equity plan that can be exercised in the event of a disagreement between the controlling shareholder and the company's board of directors, ensuring that all other shareholders realize value, valid until April 14 next year.
Unleashing a "poison pill" plan to stop barbarians from knocking on the door is Twitter's keeper.
Between offense and defense, in 2022, the most gimmicky thing on the Internet happened, and all of us watched, curious and complained, constituted a full-screen bullet screen of this business war drama - less well known is that Musk suffers from Asperger's syndrome, which is a kind of autism, has social difficulties since childhood, to some extent, leading to Musk having a strong compensatory psychology, and Twitter is the outlet for release.
When the world's richest man decides to acquire the world's largest social platform, the plot gradually enters a climax, where does Musk's $43 billion in cash come from? Can Twitter's "poison pill" program succeed? All of this determines how many episodes this commercial drama can be broadcast, or suddenly removed from the shelves?
Govern your company with Twitter
Musk is a true love for Twitter, and according to statistics, between June 2010 and June 2020, Musk released a total of 11,000 tweets, an average of six per day. In the two years from 2018 to 2020, Musk tweeted more than the past eight years combined. Musk is less of an entrepreneur with seven companies and more of a Twitter marketing number.
"I'm thinking about taking Tesla private at a $420 price point. The source of funds is guaranteed. ”
Musk once posted a tweet at 1:00 on August 8, 2018, which caused a sensation and the capital market jumped up and down.
Seventeen days later, on August 24, Musk released an open letter on Tesla's official website saying that Tesla would abandon privatization. The reason is that "most of Tesla's existing shareholders believe that Tesla would be better off as a public company." ”
Going around in circles, the tens of billions of dollar knife deals said that if you don't do it, you won't do it. On September 27, the U.S. Securities and Exchange Commission (SEC) said it would sue Tesla CEO Musk for alleged securities fraud and making "a series of false and misleading statements" in potential transactions for Tesla's privatization.
As soon as the news came out, Tesla's stock price fell sharply, falling by more than 13% at one point, and the after-hours market value lost $6.5 billion (about 45 billion yuan).
"Tesla will support Bitcoin payments"
For example, in February 2021, after Musk tweeted the announcement, this caused the price of Bitcoin to soar by 17%. He used the same tactics on Dogecoin again, tweeting endorsements many times, causing The price of Dogecoin to soar four times last year.
Musk is like using Twitter to govern the company, he especially likes to post social media, and he can always find his joys and sorrows after a wave of Twitter.
"Don't tweet after taking sleeping pills, you'll regret it." In an interview with Rolling Stone magazine, he tried to teach some life lessons from personal experience. Not long after this sentence was said, he misused Twitter to send his mobile phone number to tens of millions of fans.
He also exchanged words of remorse with reporters on Twitter and occasionally made regretful remarks. Ex-wife Justin once wrote: "Extreme success requires extreme personality... These people are usually freaks or socially out of place. ”
In-person deep involvement, pushing and pushing governance, social difficulties, all make Musk really want is one of the world's largest social media, Twitter's right to speak - Master has more than 80 million fans on Twitter, is the best way for him to show his self-awareness.
As the "king of Twitter", Musk has continued to buy shares of Twitter this year. On January 31, Musk bought more than 620,000 shares of Twitter stock in one fell swoop. He has not been absent from trading every trading day since then, buying a maximum of 4.8 million shares in one day. The latest Securities and Exchange Commission (SEC) filings show that Musk holds a 9.1% stake in Twitter. That's just over 8.39 percent of Pioneer Investments, Twitter's former largest shareholder.
For the acquisition of Twitter, another speculation is related to Web 3.0. In the concept of Web 3.0, in the future, every user will be the creator involved in operating the Internet environment, rather than the tool that now generates traffic as a platform to earn advertising fees. According to Geek Park, in the future Web 3.0 social platform, creators can use the content and influence he creates to directly generate revenue, and even have voting rights in the direction of platform development and content regulation.
In fact, whether it is the previous Bitcoin or the current experimental application of Web 3.0, Twitter has become one of the important industry communication platforms because of its natural communication chain and two-way communication capabilities. Musk is a valuable infrastructure if he wants to drive Web 3.0.
After becoming Twitter's largest shareholder, Musk first refused to join the board and sent out an intriguing "cover your mouth and smile" tweet. Now with the acquisition becoming clearer, everything has an answer.
Poison Pill Program
In the face of Musk's menacing, Twitter began a counterattack of "killing a thousand enemies and losing eight hundred" .
On April 15, Twitter's board said it had unanimously approved the launch of the Poison Pill to fend off Musk's announced wholly-owned acquisition and privatization of Twitter.
The Poison Pill Project, formally known as the "Equity Dilution Anti-Takeover Measure", invented in 1982 by martin Lipton, a well-known American mergers and acquisitions lawyer, is a widely used anti-hostile takeover tool in the financial sector.
When the company encounters a hostile takeover, especially when the acquirer's shares reach 10%-20%, the company will issue new shares at a low price or increase debt in order to maintain its controlling interest. The purpose of the Poison Pill plan is to allow the acquirer to increase the acquisition cost, and ultimately to prevent the acquirer from reaching the original planned holding company.
The reason why it is called a "poison pill" is because once this plan is implemented, it will not only have a significant impact on the control of the company, dilute the shareholding ratio in the hands of the original shareholders, but also break the principle of "equality of shares" and cause damage to the rights and interests of other shareholders.
After a long period of development, the poison pill plan has evolved a variety of measures, such as "popping" poison pills, "bouncing into poison pills", "debt" pills, and so on. At present, Twitter has not yet disclosed the details of its poison pill plan, but it is known that the trigger condition set by Twitter's poison pill plan is 15% of the shares, that is, before April 14, 2023, if anyone's shares account for more than 15%, the "poison pill plan" will be launched.
However, the poison pill plan is not invincible, and the Vanke defense battle in 2015 is an invalid poison pill.
When Vanke faced the acquisition intention of Baoneng, it was strongly opposed by the management headed by Wang Shi, but in the case that Vanke's original shareholders and new investors had the willingness to cooperate, the management was helpless, and in the end, the poison pill failed, and could only rely on the strong intervention of other parties.
Twitter's board also added that the "poison pill plan" will not affect Twitter's contact with potential acquirers, and the board will also accept acquisition offers that are in the best interests of shareholders.
This also leaves some room for Musk's acquisition, and if Musk gives a higher offer, or shows greater sincerity, then the board side can also facilitate the deal.
Where did $43 billion come from?
Even without this "poison pill", Musk's acquisition may not be smooth. In front of him were several mountains of reality.
First, there is the issue of funding. In the 2022 global billionaire list released by Forbes a few days ago, Musk won the championship with $219 billion. But the market agrees that although Musk is the richest man in the world, he is not all current assets, and it is difficult for him to come up with so much cash at once.
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 that what Bloomberg said is true, then $43 billion is undoubtedly a huge amount of money for Musk at present.
Second, if Twitter is privatized, Musk is likely to face charges and penalties. As early as a few years ago, Musk was punished by the U.S. Securities and Exchange Commission for his remarks about privatizing Tesla, and eventually settled with huge compensation. Before the acquisition was completed, Musk had already received a number of lawsuits from Twitter money shareholders, accusing him of manipulating the stock price for improper benefits.
Previously, Musk had acquired Twitter's shares in the market before the news of the acquisition was released, and according to the rules, he had to disclose it within 10 days, and he chose to disclose it when he chose to hold 9.2% of the shares, which has been suspected of violating the law.
"If Twitter is acquired, the first thing to do is to deal with robot trolls and scam emails." Musk has said that his acquisition of Twitter is intended to promote free speech, that he wants to open up Twitter's algorithms, and that Twitter should "be very careful about issuing a permanent ban and trying not to remove content from the platform." This means that once acquired, he is likely to loosen the content controls currently in place on Twitter and remove some of the "anti-hate speech" measures. Twitter has long been criticized by users for many hateful and racist remarks, and once it is released again under Musk's leadership, it is likely to be resisted by Twitter management and the majority of users.
BotSentinel, founder of analytics services website BotSentinel, said: "If someone like Musk takes over Twitter, it will have a negative impact on the world. Butch said Musk's philosophy could turn Twitter into a "quagmire of error and disinformation" with bad consequences.
Musk next
Regardless of the purpose, this acquisition war has begun.
According to Bloomberg, Twitter has hired JPMorgan Chase to provide advisory services for Musk's proposal to buy Twitter. Previously, Twitter had hired Goldman Sachs as a consultant for Musk's acquisition proposal.
The wall Street think tank's advice can only be the icing on the cake, how to deal with Twitter's poison pills, Musk needs to have his own ideas.
The direct sale of Tesla shares is undoubtedly the first channel to obtain financing. Musk is estimated to need to sell about 36.5 million shares of Tesla stock, or more than a fifth of his shares, to raise tens of billions of dollars in cash to buy Twitter. The move could not only lead to a drop in Tesla's stock price, but could also raise questions about the commitments, finances and other aspects of its CEO.
Musk could also take advantage of Tesla or SpaceX mortgages. According to the relevant information, as of June 30 last year, Musk has pledged 52% of his Tesla stock. Under Tesla's policy, pledged stock can borrow up to 25% of its value. Since then, Musk has increased the number of his shares by exercising options. His 172.6 million shares are worth $170 billion, and Musk could theoretically borrow $42.5 billion by fully pledged.
As early as December 2019, Musk said that he pledged part of the SpaceX shares, combined with the October 2021 financing information, Musk held as much as 47% of the SpaceX shares, and he could also raise $12 billion through the pledge.
In addition to this, Musk also has $54.1 billion worth of Tesla options, or can also be used for it.
At a TED event in Vancouver on Thursday, Musk also said he would seek out as many as 2,000 existing Twitter investors, thereby reducing the cash he needs to take him private.
Musk, a financing expert, has thousands of roads, but in the final analysis, more money and less money depends on whether Twitter is willing or not. Twitter's resolute release of poison pills is obviously quite prejudiced against Musk's actions. This matter is not without room for turning, between attack and defense, this commercial drama is opening the curtain.