After weeks of speculation, the deal to buy Twitter by South African billionaire Elon Musk was made official yesterday (25) at a value that should be around US$ 44 billion (about R$ 214 billion). With the acquisition, the company will no longer have shares traded on the stock exchange, and will become privately held.
The entrepreneur, founder of Tesla (electric car company) and SpaceX (space exploration), may be pleased with the acquisition, but remains in the midst of controversy. The hashtag “RIPTwitter” (rest in peace, Twitter) became part of the most talked about topics on the platform yesterday. Netizens are already threatening to abandon the social network.
Understand below the main chapters that were part of this public soap opera.
“Freedom of speech is the foundation of how democracy works, and Twitter is the digital forum for debate, where matters vital to the future of humanity are debated,” Musk said in a statement following the official announcement of the purchase.
March 2022: The Crusade Against Twitter
A very active “Tweeter” since 2009, Musk is the eighth largest profile on the social network. He had 81 million followers as of last week. Now it totals 83.8 million.
Musk is one of the biggest critics of former US President Donald Trump’s permanent ban from the platform – he was suspended from Twitter accused of inciting violence during the US Congress invasion of Capitol Hill.
He even said that he was “seriously thinking” about creating his own social network, free of algorithms.
“Freedom of speech is essential for the functioning of democracy. Do you believe that Twitter strictly adheres to this principle?”, asked Musk in a poll: 70% of the more than 2 million respondents said no.
“The consequences of this poll will be important, vote carefully,” advised the billionaire – until then, no one knew that he had already secretly bought a share of Twitter.
Free speech is essential to a functioning democracy.
Do you believe Twitter rigorously adheres to this principle?
— Elon Musk (@elonmusk) March 25, 2022
April 4: Musk buys part of Twitter and becomes largest shareholder
Musk bought nearly 74 million shares of Twitter for a total of $2.89 billion, making him the company’s largest shareholder at the time. The purchase took place on March 14 this year, but was only revealed in a report three weeks later.
The unexpected attitude raised questions about Musk’s influence on the company’s direction, which is its digital megaphone. In his years as a tweeter, Musk has manipulated the stock value of his businesses, thrown smokescreens at negative news about himself and his companies, spread misinformation about Covid-19 testing and belittled the severity of the pandemic.
April 7: Photo with marijuana and advice “on fire”
In 2018, Musk was forced to step down as Tesla chairman after a tweet posted on his account saying the company would be privately held, paying $420 per share (the symbol number for marijuana). The prank yielded a charge of fraud and misguiding investors. A fine of US$ 20 million was stipulated.
At the time, a photo of Musk smoking weed captured during Joe Rogan’s podcast sent Tesla stock plummeting. On April 7th of this year, he used that same image to say that Twitter’s next board meeting would “catch on fire”.
April 8: Musk loses his post as Twitter’s biggest shareholder
The post didn’t last long. Days after becoming the largest shareholder, investment group Vanguard revealed that it owned 82.4 million shares of Twitter, or 10.3% of the company, more than Musk invested.
April 9: “Is Twitter dying?”
Musk spent the weekend criticizing the social network. In one of the tweets, he asked if the platform was dying: “For example, Taylor Swift hasn’t posted anything in three months. And Justin Bieber has only posted once this year.”
April 9: Musk drops out of the board
Musk was even nominated and accepted to serve on Twitter’s board of directors when he bought the shares in early April. However, on the day of his appointment, he withdrew.
Rejecting the chair, the businessman broke away from a limit of holding a maximum of 14.9% of the shares (agreement between the directors), and went from a passive investor to an activist – who tries to aggressively influence the company’s policies and decisions.
The attitude demonstrated ambitious plans, and also the classic way of Musk to get involved in beef.
April 14: Musk offers billions on Twitter
The controversial billionaire offered US$ 54.20 (R$ 250) for each share he did not own in Twitter (90.8% of the company). “Twitter has extraordinary potential. And I will unlock it,” he wrote in a letter to the company’s president, Bret Taylor.
On the date, Musk already demonstrated his desire to take the company private: that is, it would no longer have any movement on the stock exchange and shareholders. According to him, there would be a board of directors, but without remuneration.
The fear that this would reduce the transparency in the company’s decisions was raised, since, with public capital, it is obliged to make public reports and be accountable to investors. Closed, there is no pressure for greater inspection of internal rules and procedures.
April 14: Musk says not to target Twitter profits
At the TED 2022 conference in Vancouver, Canada, Musk said his proposed takeover was motivated by public interest and freedom of expression, “a social imperative for a functioning democracy,” not profits.
April 15: Twitter protects itself with “poison pill”
Twitter’s board decided to adopt a maneuver known as the “poison pill” to prevent Musk from using hostile or coercive tactics to seize control of the company. In practice, if any shareholder acquires more than a 15% stake, without board approval, the remaining shareholders could buy additional shares at half the price — which would reduce Musk’s ownership and make the acquisition more difficult and expensive.
The plan, which would run for a year, was an indication that the board seemed to be leaning toward turning down Elon Musk’s offer — which it didn’t.
April 20: Money denied three times
Even the richest man in the world can’t make $43 billion overnight. Much of his fortune is locked in stocks and other investments. And even for Musk it was difficult to get credit in the market: he got three “no’s” from asset managers Blackstone, Vista Equity and Brookfield.
April 21: Musk says he made $46.5 billion
In a document filed with the SEC (United States Securities and Exchange Commission), Musk detailed his financing plan for the purchase of Twitter: two loans, one for $13 billion and the other for $12.5 billion, with the Morgan Stanley bank, and another $21 billion of his personal fortune. One of the loans has the Tesla company as collateral.
April 25: Purchase is made official
During the night of Sunday (24), there was a meeting of shareholders in which it was decided that the company should open negotiations with Elon Musk.
At around 3:50 pm on Monday, Twitter issued a statement saying it had accepted the full purchase agreement proposed by Elon Musk. The businessman will pay US$ 54.20 per share (about R$ 264) of the company. There are still no details on how Twitter’s command will look after the company goes private.
Musk plans to make the network’s algorithms public, so that people trust the platform more, and expand the fight against bots (robots or automated behavior users) that sow spam. Another idea is to authenticate all human beings who participate in the social network.
Among other changes we can expect, according to its own tweets, are: milder content moderation and the launch of the function to edit tweets (which the company has already revealed to be working on).
The businessman claims that the purchase was not made with a view to profit, but this is a challenge for years on Twitter. In recent months, the “ugly duckling of social media” has faced intense scrutiny over content issues and has struggled even harder to reignite user growth.
The challenge for the new owner will be to restructure the platform to have more audience and profit in the coming years to make their billions worth it.