The takeover, dubbed "Game of Thrones" by Wall Street analysts, came to a temporary end — Musk was about to buy Twitter.
On April 25, local time, the social networking site Twitter announced that it had reached an acquisition agreement with Tesla CEO Elon Musk, agreeing to Musk's wholly-owned acquisition of Twitter at a price of $54.20 per share, totaling about $44 billion in cash.
The deal, which has received unanimous approval from Twitter's board of directors but still requires shareholder and regulatory approvals, is expected to close in 2022. Upon completion of the transaction, Twitter will become a privately held company.
Affected by this news, Twitter U.S. stocks rose 5.64% at $51.69 per share.
Twitter said in a statement that twitter shareholders will receive $54.20 in cash per share after the deal closes, a 38 percent premium to the closing price on April 1, the last trading day before Musk disclosed his holdings.
Bret Taylor, Chairman of Twitter's Board of Directors, said, "The Board conducted a deliberate and comprehensive process to evaluate Elon's proposal, with a focus on value, certainty and financing. The proposed deal brings a substantial cash premium, which we believe is the best path for Twitter shareholders. ”
Parag Agrawal, CEO of Twitter, said: "Twitter has the goal and ability to impact the entire world. I'm so proud of our team that I've never been so inspired as I am now. ”
In the statement, Musk said twitter is a digital city square where people discuss issues that are critical to the future of humanity, "I hope to enhance Twitter's product with a series of new features, such as open source algorithms to increase public trust, human-machine verification to solve problems such as spam bots, and make Twitter better." ”
"Game of Thrones" timeline
Musk has clearly planned everything from investing in Twitter, to becoming a major shareholder, to launching an acquisition proposal. From the official announcement of the largest shareholder to the announcement of the acquisition, there are only 10 days. Twitter's board of directors also took only 11 days from boycotting the acquisition to finally nodding.
1. Become the largest shareholder:
On April 4, musk held 73.49 million shares of Twitter's common stock, or 9.1 percent of Twitter's common stock, according to documents disclosed by the U.S. Securities and Exchange Commission (SEC), making him Twitter's largest shareholder. As soon as the news came out, Twitter's stock price soared 30% at one point and closed up 27%, the largest one-day increase since its listing.
2. Invited to join the Board of Directors:
On April 5, musk will join Twitter's board for a two-year term that expires in 2024, according to SEC filings. However, the documents show that Musk must not hold more than 14.9% of Twitter stock during his tenure on Twitter's board.
3. Refusal to join the Board:
Just as multiple parties began to discuss how Musk joining the board would change Twitter, a shocking reversal occurred.
On April 11, Twitter CEO Parag Agrawal revealed that Musk decided not to join Twitter's board. However, according to SEC documents, Musk is no longer limited to holding more than 14.9% of the shares and can participate in discussions about Twitter's management.
Many Wall Street analysts believe that Musk's move is because of his attempt to seek control of Twitter.
4. Minority shareholder litigation:
On April 12, Reuters reported that Musk was sued by some former Twitter shareholders for allegedly delaying disclosure of his holdings in Twitter. The shareholders said Musk was supposed to disclose his twitter holdings by March 24 as required by federal law, but Musk made "material misleading statements and omissions."
5. Announcement of the commencement of the acquisition:
On April 14, Musk's ambition to privatize Twitter officially took the stage.
According to SEC filings, Musk offered to buy Twitter's issued common stock in cash at $54.20 per share. The move led to a 11% surge in Twitter's U.S. stock market.
6. Twitter "Poison Pill Project" Defense
On April 14, the Wall Street Journal reported that the Special Push was considering a "poison pill plan", a legal mechanism to prevent Musk from significantly increasing his stake in the company. Twitter could "dilute" Musk's stake in Twitter, making it harder for his acquisition plan to gain majority shareholder votes.
7. Musk's Plan B
Hours after sending a huge offer to Twitter, Musk gave an interview to TED.
Musk said he would have a Plan B if Twitter's board didn't accept his offer. He also said he had enough assets to complete the deal.
8. Transfer
Just on April 21, Musk said he was ready for $46.5 billion in bond and equity financing to buy Twitter and was considering proposing the acquisition directly to shareholders.
Reuters said it was the news that led Twitter's board to take the deal more seriously, with many shareholders asking Twitter's board not to miss the opportunity.
Twitter issued a statement on the same day saying that the company has received Musk's latest proposal, and the board of directors is "committed to careful, comprehensive and careful review to determine the course of action that best suits the interests of the company and all shareholders of Twitter."
Musk's entry into Twitter, what will change?
After Twitter announced his acceptance of the deal, Musk tweeted, "I hope that the harshest criticism of me can also stay on Twitter, because that's what free speech is about." ”
The New York Times has said that Musk's acquisition of Twitter could have a huge impact on the global political discourse environment, because Musk is an "absolute follower of free speech." Reuters also said Musk intends to make Twitter a "gladiatorial arena for free speech."
Musk has long advocated for absolute freedom of speech and slammed Twitter for its lack of free speech, even saying it would seriously consider building a new social media platform.
On March 25, Musk launched a vote on Twitter, asking netizens, "Freedom of speech is essential to a functioning democratic society." Do you think Twitter strictly adheres to this principle? And added in a tweet later: "This finding is very important. Please vote carefully. ”
Two days later, the voting results showed that more than 70% of netizens believed that Twitter did not abide by free speech. Musk retweeted the vote results and wrote, "Twitter is actually a 'town square, and failure to abide by the principle of free speech is fundamentally undermining democracy." What to do? Musk then added again, "Is a new platform needed?" ”
Musk has previously pointed out that Twitter is too politicized, and he recently tweeted that the policies of any social media platform "are good if the most extreme 10% or so are dissatisfied."
In addition to "free speech," Musk has also repeatedly stated that he wants Twitter's algorithmic changes. In a recent TED Talk, Musk elaborated on plans to make Twitter's algorithm an open source model that will allow users to view code and show how certain Tweets appear on their timelines.
He said the open source approach is much better than "secretly upgrading and downgrading tweets without knowing anything."
In addition, some analysts believe that after being privatized by Tesla, Twitter may accept Dogecoin as one of the payment methods. The virtual currency can be said to be popular with Musk.
Musk has recently been pushing Tesla to accept Dogecoin as a payment method for certain goods. He also mentioned in the interview that he believes Dogecoin is more suitable for trading than Bitcoin.
"Because Bitcoin's transaction volume is low and the cost per transaction is high, fundamentally, Bitcoin is not a good alternative to trading currencies, and The total transaction flow of Dogecoin has higher potential than Bitcoin."
Musk also proposed using Dogecoin for payments when he tweeted about Twitter's subscription service "Twitter Blue" on April 9.
Twitter will end the decline?
It is reported that Twitter was founded in 2006 and is now 16 years old. For an Internet company, 16 years is not young. Meta (Facebook), which was founded in the same period, has long since grown into a global Internet giant.
According to Twitter's previously announced 2021 financial report for the year ended December 31, its revenue was $5.08 billion, up 37% year-on-year, with a net loss of $221 million, compared to a loss of $1.14 billion in 2020.
Its average mDAU (monetizable daily active users) was 217 million in the fourth quarter of last year, compared to 192 million in the year-ago quarter and 211 million in the third quarter. In addition, its total advertising engagements in the fourth quarter fell 12% year-over-year. Analysts believe that Twitter has shown fatigue in terms of user growth.
In addition to the sluggish performance, in recent years, Twitter has been in turmoil, and has even become the target of attacks by different interest groups, such as some people believe that Twitter has made serious mistakes in misinformation review, suspected election fraud, etc., and some people believe that the review of opinions, including the ban on former US President Trump, is against free speech.
Beginning in 2020, Elliot Management, an aggressive hedge fund among Twitter investors, drove a big change in Twitter, putting a lot of pressure on the company's operations as a whole. Twitter founder Jack Dorsey abruptly resigned as CEO last November and was replaced by Parag Agrawal, who had served as CTO.
Musk himself is a supporter of Dorsey, and after Aglarawal was named CEO, he also tweeted that Agurawal was a dictator.
From February 2021 to the eve of Musk's announcement of his acquisition of Twitter, Twitter's stock price fell by more than half. While Twitter's stock price has continued to rise, driven by news of the acquisition, it has a huge gap in market value with companies such as rival social media giant Meta.
Washington Post commentator Max Boot has said that Musk's acquisition of Twitter may have a negative impact on society and politics.
Under great uncertainty, twitter has seen "civil unrest." Many employees questioned the company's top management how to preserve the company's culture once Twitter was acquired. Some employees suspect that Twitter will completely violate its own values and even become a "prisoner" of Musk.
Musk's entry into Twitter the dust has settled, and Twitter's change has just begun.