Has Elon Musk Freed the Blue Bird (Twitter)?
In recent years, Twitter has struggled with slow user growth and a slew of high-profile incidents. With all of the recent attention on censorship and fake news, Musk saw a once-in-a-lifetime chance. It all began on April 5, when Twitter CEO Parag Agrawal announced that Tesla founder Elon Musk would join the business's board of directors — until Musk chose not to join and instead purchased Twitter!
For the uninitiated, the words "Elon" and "Elon Musk" were trending on Twitter in April - not because the world's richest and most-followed businessman had generated a stir with his futuristic firms, but because he'd revealed a significant stake in Twitter Inc. Twitter has accepted Musk's $44 billion buyout bid as of April 25. In the midst of all of this, Twitter is set to release its latest earnings report on Thursday morning, before the market opens. The company has no plans to hold a conference call to discuss the deal's specifics — or the financial results — but they will provide investors with an update on the state of the company Musk is purchasing.
Musk is the richest man on the planet, but he's also financially strapped for a billionaire, so he'd have to cash out shares in Tesla and SpaceX, the two firms he's nominally running, while whipping us all into a frenzy over his entirely unneeded plans to purchase Twitter and remake it in his image. Meanwhile, Twitter is preparing a poison pill defence to counter Musk's advances, which would allow existing shareholders to acquire more stock at extremely low prices, effectively diluting the company's shares and driving up the price of his bid. Shareholders will get $54.20 per share, a 38% premium to the company's April 1 closing stock price. The agreement should be finalised by the end of the year.
When did this begin?
Mr. Musk has been the world's wealthiest individual since January 2021, with a net worth of over $257 billion as of Tuesday. In which he owns a 21% share, Tesla is the source of the majority of his fortune. Mr Musk is the co-founder of neurotechnology venture Neuralink and artificial intelligence business OpenAI and the CEO of electric automobile giant Tesla, the aerospace company SpaceX, and infrastructure company The Boring Company.
Musk announced on April 4 that he had purchased 9.1% of the Twitter stock, making him the company's largest stakeholder at the time. He was offered a position on the company's board of directors, but he declined.
Musk began secretly increasing his ownership in the company on January 31, well before his public revelation. It's unclear if the Tesla entrepreneur had any plans to buy Twitter outright at the time. Musk then made a surprise offer on April 14 to buy 100% of Twitter for $43 billion.
Twitter Patent Portfolio:
Top Technology Domains
The majority of Twitter's revenue comes from third-party advertising, such as Promoted Tweets, Promoted Accounts, and Promoted Trends. But it also comes from a wide array of technology licensing and patents. The technology domains it is most active in are related to computers, digital communication and management methods, given the nature of the brand and its activities. Twitter is also trying its luck in entering different arenas one step at a time!
Headquartered in San Francisco, California, Twitter has always been the talk of the town in the USA, evident from the number of patent filings. According to a survey, the US accounts for 76.9 million users, which is the highest among all countries. Other countries are way behind because the user-base or trend of twitter in these countries is far less than what it is in the US.
Who Will Run Twitter?
Both CEO Parag Agrawal and Chairman Bret Taylor were quoted in the announcement, meaning they'll continue to lead the company for the time being. Musk has often posted his discontent with Twitter's board of directors and how the company has been governed in recent weeks. Management changes are customary when a company is bought. However, because Musk is already the CEO of Tesla and SpaceX, his ability to take on another hands-on leadership role may be constrained.
The dissatisfaction of Elon Musk
Musk has spoken openly about his intentions to turn the site into a safe haven for uncensored online expression, and he has complained that the service is too strict in its moderation of user tweets. He's also proposed turning the company's headquarters into a homeless shelter, banning advertisements for paid users, and beefing up the platform's authentication procedures. "I hope that even my harshest critics remain on Twitter because that is what free expression means," he tweeted only hours before the deal was disclosed.
Will Trump make a comeback?
The short answer is that it's far too early to say. In a piece published Monday on Fox, Trump stated that even if he were allowed back onto the site, he would not return and instead utilise his own Truth Social app. But it's difficult to imagine the former president, who is clearly addicted to Twitter, declining to utilise it if given the chance. The real question is whether Twitter, now that Musk owns it, will overturn its decision to ban him. Musk has made it quite obvious where he intends to take the platform in terms of free expression.
Effect on the Crypto World!
Elon Musk's tweets have previously been known to shake the crypto world and influence prices, particularly Bitcoin, Dogecoin, and Shiba Inu. Now that he essentially owns Twitter, he will have even more clout on the internet than he already did. Twitter might become a monopoly, influencing the crypto markets depending on the coins it supports and the advertisements it chooses to broadcast. He can help to solve some of the world's biggest communication problems by resurrecting Twitter and making it the communication powerhouse it has the potential to be. In any event, this should be intriguing going ahead, and Musk's influence as a Twitter shareholder may assist speed bitcoin acceptance in the best-case scenario.
What will be the fate of Twitter?
Corporate takeovers are complex, especially when they are as large as Twitter's.
Mr. Musk acquired $46.5 billion in financing to take Twitter private, which was enough to persuade the company's board to meet with him at the bargaining table. Mr. Musk, on the other hand, is "making an approximately $21 billion equity commitment," according to Twitter. We have no idea where the rest of the funds will come from. Now that the acquisition has become friendly, private equity companies, who traditionally eschew hostile takeovers, may join in. Existing shareholders may be able to transfer their shares to the new private firm.
Twitter's shares will be delisted and the company will be taken private as part of the takeover, which is scheduled to close later this year. Musk claims that this will allow him to make the changes he wants to the company.
He has proposed, among other things, enabling longer posts and allowing users to amend them after they have been published. Following the announcement of the acquisition, Twitter's stock rose more than 5% on Monday. However, it remained below Mr. Musk's $54.20 per share bid, indicating that Wall Street believes he is overpaying for the company.
Musk has stated that he is unconcerned about the purchase's finances. He will, however, be taking on a corporation with a shaky financial track record. Despite its popularity, Twitter has never made a profit, and user growth has stagnated, notably in the United States. The company, which was started in 2004, finished 2021 with $5 billion in revenue and 217 million daily users worldwide, far less than rival platforms such as Facebook. So, let's be honest, no one knows whether the best period of Twitter is about to begin, or whether this is the beginning of the death of the service.