Elon Musk buys Twitter for $44 billion

Twitter accepted, this Monday (25) the offer of US$ 44 billion (R$ 214 billion) made by billionaire Elon Musk to buy the social network. The decision comes after the company’s board of directors recommended the transaction to shareholders.

The acquisition — one of the biggest in corporate history — could make Musk a social media baron, with the power to control what he himself has called the “de facto public square of the world.”

During the extensive back-and-forth that marked the negotiations, the Tesla owner showed little economic interest in the purchase. For him, the acquisition was a way to reverse Twitter’s moderation policies — of which he is a vocal critic.

The billionaire, who describes himself as an absolutist of free speech, argued that making the social network a private company would be a way to guarantee the free flow of ideas.

“Having a public platform that is extremely credible and widely inclusive is extremely important for the future of civilization,” he said in a TED interview on the 15th.

The details behind the purchase have yet to be announced, but as reported last week, Musk has managed to put together a financing package.

According to a document submitted to the SEC (US Securities and Exchange Commission), the billionaire aligned US$ 25.5 billion through loans with a group of banks led by Morgan Stanley. The rest he said he would provide personally, but without detailing the origin.

What is Elon Musk’s interest on Twitter?

In public statements, the Tesla owner insisted that he would not profit from acquiring the platform. As he has said time and time again, the goal is to ensure that the network keeps up with his perception of freedom of expression.

Musk argues that, when in doubt, the ideal is to favor freedom over moderation. “If there’s a gray area, in my opinion it’s better to let the tweet exist,” he said at a TED event.

At the time, the billionaire also said that Twitter should avoid deleting messages, which would open the door to hate speech, extremist opinions, among other content that is currently restricted.

In addition, Musk is in favor of temporary suspensions rather than permanent exclusions, which could pave the way for the return of personalities banned from the network, such as former US President Donald Trump.

When did Elon Musk decide to buy Twitter?

The story behind the acquisition began on March 14, when the billionaire bought shares in the company but did not disclose the transaction.

Nine days later, Musk took a poll on his profile questioning whether the network strictly followed the principles of freedom of expression. More than 70% of respondents said no. At the time, he said the research would have important consequences.

It was only on April 4 that Elon Musk revealed that he had bought a 9.2% stake, becoming the largest shareholder in the social network.

Twitter tries to create barriers for Musk to act

The day after the purchase was announced, Twitter said it intended to nominate the businessman to the board of directors. The appointment, however, was not exactly an invitation.

The offer would block Musk’s move, as with a seat on the board he cannot own more than 14.9% of Twitter’s shares.

The businessman even published that he was looking forward to working with Parag Agrawal, the company’s CEO, and making what he called significant improvements.

However, on the 11th, Musk declined the invitation to join the board and, in the same week, announced his proposal to buy Twitter.

According to him, the social network needed to become a privately held company to have effective changes and become “the platform for freedom of expression around the world”.

Twitter uses poison pill

After Musk declined to sit on the board and make his takeover bid public, Twitter launched a corporate ploy known as the “poison pill.”

The strategy is to flood the market with new shares or let shareholders buy them at a discount. The tactic serves to discourage and prevent the transfer of controlling interest to a large investor or corporation in a hostile manner.

For Musk to continue his endeavor, he would have to convince Twitter investors to sell their shares directly to him.

The maneuver was the last attempt to contain the billionaire. What didn’t work. After presenting his financing plan to fund the offer, Musk was able to pressure the company’s board to negotiate with him.

What are the dangers of Musk controlling Twitter?

The purchase of Twitter is seen as Elon Musk’s way of directing the future of a platform he uses, constantly, to conduct personal revenge campaigns and promote his agenda.

In addition to criticizing Twitter’s own guidelines, the Tesla owner has a history of controversial statements.

He recently made statements about Tesla’s financial health. The comment about the delisting of the automaker made it the target of inspection by US capital market authorities.

This week, he also made fun of Bill Gates’ appearance after turning down a philanthropy meeting. “In case you need to lose an erection fast,” he wrote.

Twitter X-ray

• Market value (at 12:00 this Monday) – US$ 38.73 billion
• Revenue in 2021 – US$ 5 billion
• Result in 2021 – Net loss of US$ 221 million
• Number of employees – 7,500
• number of users – 217 million

Follow the story of Twitter

• March 21, 2006 > Foundation –Jack Dorsey, co-founder and CEO, publishes first tweet
• Mar.2007 > The social network has a surge in popularity during the SXSW (South by Southwest) festival, reaching 60,000 tweets a day
• Oct.2008 > Evan Williams becomes the CEO
• Feb.2010 > Network reaches 50 million tweets per day
• Oct.2010 > Dick Costolo becomes CEO
• Dec.2010 > Twitter Raises $200 Million, Reaches $3.7 Billion Valuation
• Mar.2011 > Network reaches 140 million tweets per day
• Jun.2011 > Release of the Portuguese version
• Oct.2013 > Announcement of the IPO on the NYSE (New York Stock Exchange)
• Nov.2013 > Twitter reaches $31 billion market cap
• Oct.2015 > Jack Dorsey returns as CEO
• Jan.2021 > Twitter deletes Donald Trump account for risk of incitement to violence
• Nov.2021 > Dorsey leaves Twitter and Parag Agrawal assumes the presidency
• Mar.2022 > Elon Musk buys 9.2% stake in Twitter
• Apr.2022 > Musk makes $43 billion offer

Sources: Twitter, NYSE, Wikipedia