(Global TMT, April 26, 2022) Just the day before, many people were surprised that Twitter's attitude towards Musk's acquisition seemed to have changed, and soon after, there were reports that Musk had won Twitter in one fell swoop, and the plot progress was very rapid.
The industry's first report: Musk's acquisition of Twitter reaches an agreement
Source: PRNewswire
The first to issue the press release was PRNewswire. At 14:50 ET on April 25, Twitter issued a press release through PR Newswire to formally announce that Twitter has reached a definitive agreement to acquire an entity wholly owned by Elon Musk for $54.20 per share in cash, with a transaction value of about $44 billion. Upon completion of the transaction, Twitter will become a privately held company. Since then, CNBC and other well-known media in the technology industry have cited PR Newswire sources to publish the news. At this point, it can be said that "boots landed", and Musk won the tweet "efficiently and confidently".
Source: PRNewswire
In a PR Newswire press release, Twitter explained the terms of the agreement. Twitter shareholders will receive $54.20 in cash for each of their twitter common shares after the proposed transaction closes. The purchase price is a 38% premium to Twitter's closing price on April 1, 2022, the last trading day before Musk disclosed that he held about 9% of Twitter. Twitter also said Musk would pay $21 billion directly for the acquisition and has secured an additional $25.5 billion in financing, including debt financing and margin loan financing. The parties did not impose financial conditions on the closing of the acquisition. The deal, which is expected to close in 2022, is currently the world's largest privatization deal by amount.
Bret Tylor, Twitter's independent chairman and co-CEO of Salesforce, said the board conducted a detailed and comprehensive assessment of Musk's acquisition offer, especially in terms of value, certainty and financing. The deal could result in a substantial cash premium, which the board believes is the best way for Twitter shareholders.
Twitter CEO Parag Agrawal said Twitter has purpose and relevance to impact the entire world. We are proud of our team and inspired by the incomparable importance of our work.
Key Turning Point: Why Did Musk's Acquisition Succeed?
A brief review of Musk's acquisition of Twitter: On April 4, Musk became Twitter's largest outside shareholder. On April 14, it announced the acquisition of Twitter for $54.20 per share, or approximately $43 billion in cash. At this time, Twitter's attitude is still very tough, giving Musk a "poison pill" plan. The key turning point came on April 21, when Musk said he had secured $46.5 billion in financing. Since then, although Twitter's board still feels that the price is lower than expected, it has also begun to seek negotiations with Musk.
Some industry insiders have analyzed that the total shareholding of the 11 members of Twitter's board of directors is less than 2.5%, if you do not count the 2.253% of co-founder Dorsey, the total shareholding of the remaining 10 people is less than 0.1%. In addition to Musk, Twitter's major shareholders include Vanguard, Morgan Stanley, Blackstone and State Street, with 8.8%, 8.4%, 6.5% and 4.5% respectively. Morgan Stanley is twitter's third-largest shareholder and musk's financial advisor and financing firm for the acquisition of Twitter, and Twitter's board lacks sufficient voting rights. At the same time, because Twitter's listing in 2013 did not set up an equity structure of AB shares, the company's founders and executives did not have super voting rights, and it was difficult to control the company without dominant shareholding.
The business empire of the richest man: Musk has the say
After winning the tweet, the Internet celebrity Musk can also be regarded as able to show his grand aspirations in the field of social media. After all, before buying Twitter, the "social maniac" with more than 80 million followers seriously considered creating a new social media platform. If you take a longer view, in addition to the "acquisition of Twitter" move that has just been completed, Musk's chess pieces also cover many fields such as automobiles, energy, space, transportation and so on.
tesla
Tesla, the American electric car company, is the company with the closest ties to Musk. Founded in 2003 by Martin Eberhard and Mark Tapening, the company manufactures and sells electric vehicles, solar panels, and energy storage equipment. In February 2004, Musk invested $6.3 million in Tesla, provided that he became chairman of the company and had the final say on all matters, and Martin Eberhard was the company's CEO as Tesla's father. In October 2008, Musk became CEO of Tesla. Interestingly, in 2018, Musk tweeted that he might take Tesla private at $420 per share, saying that "the funds are in place", but 17 days later Musk announced that he was abandoning the plan.
On January 27, 2022, Tesla released its 2021 full-year financial report. Revenue for 2021 was $53,823 million, up 71% year-over-year, and net income attributable to shareholders was $5,519 million, up 665% year-over-year. At the same time, Tesla's global deliveries in 2021 also reached 936,200 units, an increase of 87% year-on-year. Among them, the delivery volume in the Chinese market was 484,100 units, an increase of 235% year-on-year. In the first quarter of this year, Tesla's profit soared by nearly 700% to $3.318 billion. Total revenue for the first quarter was $18,756 million, up 81% from $10,389 million in the year-ago quarter. There is no doubt that Tesla is the world's number one manufacturer of pure electric vehicles.
SpaceX
SpaceX, a space exploration technology company founded by Musk in June 2002 with a $100 million investment, became CEO and chief technology officer. Musk's "Martian" title is related to SpaceX. Musk has been very interested in colonizing Mars for many years, and he once publicly stated in an interview with the media that he wanted to build a human community on Mars, and thought that it would be possible in about 2024. Although the "Mars Colonization Program" is not very reliable, SpaceX successfully completed the manned flight. In addition, since the first launch of the Mega Constellation Project in 2019, SpaceX has launched more than 2,300 Starchain satellites into low-Earth orbit.
The Boring Company
The Boring Company, founded in December 2016, is a rail transit company that tackles ground congestion. According to Musk's vision, he will install a "pallet" on the ground where the car is suspended, and after the car is parked, the pallet will descend to the ground, and the car will be transported quickly between the underground tunnels, and the fastest speed will even reach 200 kilometers per hour. On April 20, The Boring Company announced that it had raised $675 million in a Series C funding round, which has prompted the company, which is committed to creating an underground tunnel network and 3D transportation, to a current valuation of $5.675 billion.
Neuralink
Neuralink is a company founded by Musk that studies brain-computer interfaces. The brain-computer interface is to implant a very small electrical level into the brain, using the current to make the computer and brain cells "interact". Recently, Musk revealed that Neuralink will focus on solving brain and spine injuries in the next decade, and said that the company is expected to conduct its first human trials by the end of this year.
PayPal
Musk also had a "fate" with payment giant PayPal. PayPal's predecessor was in 2000, when Confinity merged with musk-founded X.com to rename the X.com PayPal. At the time, Musk was CEO. In 2002, e-commerce giant eBay bid to acquire PayPal. Musk is the largest shareholder in PayPal, owning an 11.7 percent stake. Later, PayPal quickly developed into a global mobile payment giant and spun off from eBay.
Shortly before that, Musk created three holding companies called "X Holdings," which made it possible for him to attribute all of his business to one parent company. After the acquisition of Neng Twitter, Musk's business empire has also shifted from physical manufacturing to the Internet and media, and has the initiative on social media, perhaps the premise of achieving "freedom of speech" is to have "right to speak" in the company first.
Musk's Next Step: Twitter's Future Is Also "X"
After Musk reached an agreement with Twitter, Musk issued a statement saying that improving products through new features, opening up platform algorithms to enhance trust, fighting fake trolls, verifying all human users, and helping the Twitter platform get better. Musk has planned a series of "reforms" after becoming Twitter's majority shareholder, such as proposing price cuts for Twitter's Blue subscription service, banning ads and allowing users to pay with Dogecoin, and transforming Twitter's headquarters into a homeless shelter.
Musk also said that he would rebuild the salary system. He said that if he succeeds in acquiring Twitter, the company will not have to pay any salary to the board in the future. As a result, the company could save about three million dollars a year.
As for the existing management, Musk has admitted that he is "disappointed" in them. Twitter's current CEO, Parag Agrawal, who just took over jack Dorsey last year, would receive about $42 million if Parag Agrawal was fired within 12 months of Twitter's change of control. Parag Agravar said at the staff meeting that twitter will face uncertainty in the future after Elon Musk completes the privatization deal for Twitter.
Later, Musk will attend a question-and-answer session at the employee meeting. At that point, Musk may bring some "definitive" messages to Twitter's future.