Wen 丨 Zongwei
Musk recently did another big thing — spending $44 billion, or about 2,875 yuan, to acquire social media giant Twitter.
It's really rich and willful.
Twitter, born in 2006, has been controversial in recent years, both in the field of public opinion and in business. How will Musk transform Twitter after he buys it? Will Trump return to Twitter?
1
Musk's purchase of Twitter can be said to be a pre-publicized acquisition.
Many domestic media reported that Musk's comprehensive acquisition of Twitter began on April 4 at a cost of $3 billion to buy a 9.2% stake in Twitter.
This statement is actually inaccurate.
Musk didn't buy so many Twitter stocks in one day. He started at the beginning of the year, basically buying and buying every trading day, buying more than 4 million shares in a day.
No. 4 is only in accordance with regulatory regulations, after the change of Twitter's largest shareholder, it needs to disclose information to the outside world.
Musk is a steady winner of this process.
After reaching a high of $72 last August, Twitter shares have fallen all the way to more than $30 in the first quarter of this year. Then as soon as the news of the 4th came out, it soared by more than 30% on the same day.
Musk's stake has risen to more than 4 billion.
Twitter then invited him to join the board, but was refused.
Spend 3 billion to become the largest shareholder, actually do not want to join the board of directors, rich people are so willful?
Just when the world was speculating about Musk's next move, he released heavy news -
It will acquire Twitter in its entirety at $54.2 per share, totaling nearly $44 billion.
Twitter's board is gone.
After all, after Musk bought Twitter, these senior migrant workers will not lose their jobs and will have to reduce their wages. Because Musk has long complained that Twitter's directors do not deserve to be paid millions of dollars a year.
Twitter's board quickly passed a resolution to prevent Musk from further acquiring shares, at the expense of implementing the "poison pill" plan.
The so-called "poison pill" plan is that once Musk's shares exceed 15%, Twitter will issue new shares, and other shareholders can buy new shares at a discounted price to increase the cost of Musk's acquisition of Twitter.
Originally 44 billion is enough, now it may be more than 50 billion, or even 60 billion.
However, the shares of other shareholders will also be diluted, so the original intention of the "poison pill" is to kill a thousand enemies and lose eight hundred, and it will not be used until a special moment.
But who is Musk, he is the richest man in the world, is there still a difference of one or two billion?
Musk is fighting a psychological war, constantly shouting at Twitter, I have made up enough 40 billion, banks are willing to lend me money, you give up resistance.
Eventually, in the face of capital, Twitter's board softened and decided to accept Musk's acquisition agreement.
2
Musk bought more than 40 billion from Twitter, where did the money come from? Is it true that he said that the banks were vying to lend him money?
According to the Bloomberg Global Billionaires Index, Musk's total wealth is about $250 billion, mostly the value of Tesla stock, about $170 billion, followed by SpaceX's valuation.
To put it bluntly, Musk's money is all on the books, and the liquidity is said to be only 3 billion. Coincidentally, the money to buy the first part of Twitter was exactly 3 billion.
Many people may say that he can sell Tesla stock. But it's not a good operation —
Selling stocks begins with a huge tax, and the various tax rates add up to more than 50%. In other words, he has to scrape together more than 40 billion yuan and sell more than 80 billion worth of stocks.
And selling shares meant diluting the shares, which would weaken his control over Terrass. Abandoning Tesla for the sake of Twitter is not worth it.
Raising money also depends on stock collateral.
Tesla allows executives to take stock-backed loans, capped at 25 percent of the value of the stock. So in theory, Musk can fully borrow more than 40 billion.
But there is also a risk in fully mortgaging the stock, what if money is used elsewhere? And Musk has mortgaged a part of Tesla stock in order to pay taxes.
Fortunately, at this time, the capital market has moved.
Banks and brokers who had previously held a wait-and-see attitude, seeing musk's acquisition of Twitter on the stock price, have expressed their willingness to give generously, including big investment banks such as Morgan Stanley. By the way, Morgan Stanley itself is Twitter's third-largest shareholder.
Therefore, capital never does loss-making transactions. Lend money to the world's richest man, are you afraid that he can't afford it?
Musk's acquisition of Twitter still needs two more steps to really complete .
The first is the release of the Twitter shareholders' meeting. Twitter will release a first-quarter financial report in these two days, and it is expected to vote at that time. The second is the approval of the US regulatory authorities.
Most analysts believe the U.S. Department of Justice and the FCC are unlikely to block the acquisition.
The regulator's focus is on antitrust, and Tesla, SpaceX and Twitter are completely different and do not constitute any form of monopoly.
And historically, the entry of the Super-Rich into the media industry in the United States is a completely basic operation.
Musk's old rival, Bezos, for example, bought The Washington Post in 2013 and invested in Business Insider. Jobs's widow bought Atlantic Weekly.
3
Then again, there are so many excellent companies in the world, why does Musk like Twitter?
After all, more than $40 billion is not a small amount, and Twitter's development in recent years is also average, the market value has been thrown more than 10 times by Facebook, and even the rising star Snapchat has surpassed it.
Purely in terms of investment value, buying Twitter is not a wise choice.
But is the mind of the richest man guessed by ordinary people?
After Twitter's board approved the takeover deal, Musk tweeted a little essay, presumably meaning that I invested in Twitter not to make money, but because I believed in Twitter's potential as a platform for free speech.
Buckle up the hat of freedom of speech, and the acquisition looks tall.
It is undeniable that Twitter, one of the world's largest social media platforms, has faced many controversies in recent years, such as the permanent ban on Trump's account since the Capitol Hill riots last January.
While flaunting freedom of speech and arbitrarily banning accounts, liberals and conservatives alike are dissatisfied with Twitter's operation.
Interestingly, a Republican lawmaker proposed to Musk that he hoped to release Trump from the small black house after the acquisition was successful. It's just that Trump himself made a statement two days ago, saying that Musk is a good person, but I still continue to engage in my own social platform.
It seems that Trump is also scared, and other platforms are sealed, not as reliable as their own platforms.
Of course, Trump did not say the words to death, in case he runs for president again, who knows if he will use Twitter again?
Before waiting for the boots to finally land, the most concerned outside world now is, what changes will Musk make to Twitter?
He launched a vote on Twitter some time ago to collect netizens' opinions on editing options. As a result, nearly three-quarters of netizens favor allowing tweets to be modified afterwards.
Musk also said that he hopes to make Twitter's algorithm public and more transparently show the specific logic of content recommendation and blocking.
To put it bluntly, Musk believes that Twitter is now too much control, and the platform scale should be more relaxed -
"I hope that the people who scold me the hardest will stay on Twitter, because that's what free speech is all about."
Musk's acquisition of Twitter may also have a selfish agenda.
If Trump used to be a typical example of Twitter governance, then Musk can be said to be the representative of Twitter governance. He has more than 80 million followers, has sent more than 10,000 tweets so far, and often "reviews" Tesla .
One will say that Tesla's stock price is too high, and the next day it will fall by more than a dozen points; one will let netizens vote on whether to sell Tesla stock, resulting in the stock falling again.
If you have complete control of Twitter in the future, is it easier to understand if you post similar tweets?