Desperate to acquire Twitter, what is Musk to do?

Image source: Visual China

On April 25, local time, Twitter announced that the company's board of directors had accepted Elon Musk's plan to acquire it for $44 billion and take it private. Musk made the acquisition for the "best and final offer" he initially gave — $54.20 per share. The deal is expected to close in 2022.

The acquisition proposal ran into obstacles along the way, but it went far smoother than Musk had anticipated.

On April 15, Twitter's board unanimously approved the "Poison Pill Program" to crack down on Musk's "hostile takeover." The plan means that once Musk's shareholding reaches 15%, Twitter will issue a large number of new shares, allowing existing Twitter shareholders other than him to buy additional shares at a discounted price, thereby diluting Musk's shares and hindering the execution of its acquisition plan.

But Musk didn't stop there, winning support from multiple parties, including more than a dozen banks, in the days since, and said he has secured $46.5 billion in bond and equity financing commitments.

Musk said Twitter's business problems are backlogged for a long time, and the company itself will never be able to raise the stock price to $54.2 per share. After that, Twitter's attitude was relaxed until the acquisition plan was approved on the 25th.

Bootle Taylor Taylor, chairman of Twitter's independent board, said: "This transaction brings a huge cash premium, which we believe is the best way forward for Twitter's stakeholders. ”

According to Reuters, the deal still needs a shareholder vote. Analysts say no regulatory hurdles are expected. This should be a smooth outcome for Musk, who said in an interview after announcing the Twitter acquisition plan that he also prepared Plan B if the current plan does not work.

Musk's ambition for Twitter makes people have to think about the motivation behind it.

According to the world's richest man, the original intention of acquiring Twitter was not to make a profit, to achieve monopoly, or to maximize Twitter ownership, but to build a more inclusive public platform, which he believes will be crucial for future civilization.

This deal is really not a good choice for Musk for the purpose of making money. Twitter user growth is slowing, operating costs are too high, and it is vulnerable to website attacks. As an Internet product, analysts are not optimistic about the value of Twitter.

"Twitter isn't differentiating," said David Treyner, CEO of investment research firm New Construct, "and its share price shouldn't go above $10 or $15." Goldman Sachs was also not optimistic about Twitter, saying that without Musk, its basic business would be worth $30 to $36 per share.

Even so, the purpose of improving democratic institutions comes from the mouth of Musk, who is the number one on Twitter, and needs to be questioned.

Twitter, a 16-year-old global forum of speech, has long been criticized for its liberal democracy. Musk used this as an incision to claim that people should speak freely from the level of reality and experience within the scope of the law.

But "freedom of speech" is not something that can be bought with money, and there is a certain degree of conflict between giving freedom to others and accumulating capital.

Musk put forward some transformation directions and visions in an interview, but there is no specific business transformation plan at present. Whether it's eliminating spam and bot hordes, pushing algorithms open source, making all recommendations and throttling operations visible, or practicing the "edit" option more broadly, how much will end up is unknown.

There are many gray areas that are difficult to define about the rhetoric, and after the transaction is completed, the final decision will most likely belong to the new owner of Twitter. It is important to note that the large amount of information in the gray area may become the key to guiding public perception, and if this is in the hands of one person, the end result may be contrary to the vision depicted by them.

In addition, Musk's opposition to the "permanent ban of accounts" has attracted much attention, because it is directly related to whether the former US President Trump, who once went alongside Twitter, can return to Twitter. Since Trump was banned last January due to riots on capitol Hill, he has completely disappeared from the platform.

But on the day Musk's acquisition proposal was approved, Trump said that even if his account was unblocked by privatized Twitter, he would not return to Twitter, but would insist on speaking out on true social media platform Truth Social.

On April 27, Truth Social rose to number one on Apple's U.S. App Store free app list, surpassing Twitter and TikTok.

Two opinion leaders who used to have absolute influence on Twitter, one started after stepping down as president of the United States, and the other directly appropriated Twitter for himself. Trump, a political leader with a distinct personality, even if he is not re-elected as president, has a loyal following, and the reluctance of his political career will give his social media platforms a strong personal color.

Musk's personal intensity is not inferior to Trump's, so will Twitter operate under his shadow in the future?

The first to pay attention to and worry about this are Twitter's internal employees, who began planning to resign in the company's internal group within a few minutes after the news of the acquisition plan came out.

Twitter employees have always rated the company's work-life balance highly, and on the anonymous comment forum Blind, Twitter received a high score of 4.4 out of 5 on this item. Tesla's score is 2.5 points, and Space X's score is 2.1 points.

Musk's companies are known for their extremely harsh corporate cultures, which means that employees may have to face a different situation after the company changes owners.

Edward Perez, director of product management at Twitter's social health team, said in a post on the afternoon of the 25th local time that he and his team felt "real discomfort and uncertainty".

In fact, Musk is also aware of his overflowing desire to control, he once described himself as a "nanomanager", saying that he is more detail-oriented and more controlling than a "micromanager". Even though I realized that "this is not the secret of happiness," I still have no intention of changing. This may be the key to his success, but it is not a reason for a company to gain love.

Unlike Tesla and Space X, Musk is not really concerned about the product itself for Twitter, but the expansion of his own influence after having Twitter. For a long time in the past, he has used Twitter as a good feature: posting a tweet can cause ups and downs in a company's stock price and the state of the cryptocurrency market. After privatizing it, he will have the opportunity to let the rules change as he wishes.

The acquisition of Twitter is not without pressure for Musk, who has several jobs. The day after the acquisition was announced, Tesla's stock price plummeted more than 12 percent, shrinking its market value by $126 billion. Concerns that Musk dumped Tesla stock in large quantities to acquire Twitter are undoubtedly an important reason for the plunge.

As more and more business is in his hands, his words and the decisions he makes will affect his whole body. In the future, Musk is bound to hover between the balance of interests of the major companies he is responsible for, and at the same time need to cope with more attention from the international community and regulators.

From the conversation between Musk and Chris Anderson at TED's 2022 conference, when asked if he wanted to buy Twitter a week before he proposed the acquisition plan, Musk denied it and said it would make him feel painful because everyone would blame him for all the problems. But he changed his mind less than a week later, because people blamed him anyway.

As he thought, there is a great probability that these will happen in the future. Musk has made his choice and got it.

Musk has achieved "calling the wind and rain" through Twitter, and this tool will be completely in his hands after the transaction is completed. Will people look at the content he posts from a different perspective in the future due to changes in the ownership of the tool? (Fortune Chinese Network)

Editor: Anqi Yang

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