After creating Tesla and SpaceX, and making bitcoin and Dog Coin popular, musk is eyeing a new prey – twitter. After becoming the largest shareholder and refusing to join the board of directors, musk proposed to acquire 100% shares of Twitter and change Twitter’s surname to “Ma”. In the past few days, musk and twitter have been competing fiercely for equity on the other side of the earth.
As the online celebrity of twitter, musk, with more than 80 million followers, often expresses his dissatisfaction with the experience of using Twitter, especially the various speech restrictions on twitter. If you are dissatisfied with it, buy it. This is Musk’s logic of “overbearing president”. However, even with the “cash ability” of the world’s richest man, musk may have to overcome the three difficulties of shareholders’ will, capital and regulatory mechanism if he wants to really win twitter.
rights game
Twitter is going to change its name to ma? It’s not jack horse or pony horse, but Musk’s “horse”.
This is not Musk’s whim, but like a cheetah aiming at its prey.
In the first step, musk suddenly spent $3 billion to buy 9.2% of Twitter and become the largest shareholder of twitter.
The second step, when twitter offered him a board seat and invited him to join the board, he flatly refused.
Third, he wants to buy the whole twitter.
Musk’s offer is $54.2 per share, which is higher than Twitter’s current share price and the price when he last bought twitter shares on April 1.
I was still buying stocks a few days ago and suddenly became a company. Musk will spend another $43 billion, one sixth of his current $270 billion wealth. Twitter is currently worth $35 billion.
Although musk once again showed his “money ability”, his twitter road is not smooth. Analysts pointed out that if musk really wants to win twitter, he will have to overcome three difficulties: shareholders’ will, capital problems and regulatory mechanism.
Obviously, the first level is not very smooth. Before the weekend break, Twitter’s board of directors offered a “poison pill plan” overnight to block Musk’s acquisition intention. According to this plan, if anyone holds more than 15%, the company will allot new shares to other shareholders at a low price, so as to dilute the shareholding ratio of major shareholders.
In other words, if musk buys more than 15% of twitter shares, other shareholders will be able to buy new shares at a discount, which will dilute Musk’s equity and make the acquisition more expensive.
It seems that money is not everything. In other words, the money is not enough. However, musk also said that this is his highest and final bid. If rejected, he will reconsider his position as a twitter shareholder.
In other words, if you refuse me, I will withdraw my capital, which means that the share price of Twitter has fallen sharply. Shareholders not only did not get the premium, but suffered heavy losses.
Daniel, an analyst at Wade Bush securities, said the launch of Twitter’s “poison pill program” was not surprising. “They are ready to fight musk and are also winning time to find other potential buyers.”.
The twitter board of directors may choose to refuse its acquisition. Musk is also prepared. He said he is ready for “plan B”. He doesn’t want to break up with the twitter board of directors. He has evolved his plan to the ultimate moment.
For Twitter’s “poison pill plan” and how to deal with the requirements of Musk’s acquisition, the reporter of Beijing business daily interviewed twitter, but as of press time, no reply has been received.
where did $ 43 billion come from
In addition to internal opposition, it is unclear where Musk’s $43 billion acquisition financing came from. In the latest global billionaire list released by Forbes in 2022, musk won the championship with us $219 billion. However, the market agreed that although musk is the richest man in the world, he is not all liquid assets. It is difficult for him to take out so much cash at once.
“Barron weekly” pointed out that although Musk’s net assets are estimated to be between $219 billion and $259 billion, most of his wealth comes from Tesla‘s shares and his privately owned Rocket Company SpaceX.
However, musk has tens of millions of financing paths. As early as December 2019, musk said he pledged some SpaceX shares. Combined with the financing information in October 2021, musk held up to 47% of SpaceX shares, and he could also raise $12 billion through pledge.
Musk may also have to sell Tesla shares and a large number of loans to finance the acquisition. The sale of shares will lead to a decline in Tesla’s share price and raise questions about Musk’s financial and other commitments.
Wells Fargo analyst Colin Langan pointed out that after musk bought a 9.2% stake in twitter, he currently has about $3 billion in cash and other current assets. In addition to his already held twitter shares, he still needs $36 billion to complete the transaction, which means selling about 36.5 million Tesla shares, equivalent to more than one-fifth of his shareholding.
In addition, regulation is also a great uncertainty. For Musk’s purchase of twitter shares, regulators may investigate his allegations of market manipulation.
For example, the securities and Exchange Commission (SEC) is an old enemy. In 2018, musk casually said that he wanted to privatize Tesla, but he didn’t have enough money to do it. That time, musk was investigated by the SEC and finally lost his position as chairman of Tesla. So far, he is only the CEO of Tesla.
Before releasing the acquisition news, musk had acquired twitter shares in the market. According to the regulations, he must disclose it within 10 days, and he chose to disclose it only when his shareholding reached 9.2%. This has been suspected of violation.
ideal or business
From the first tweet to now, musk has been active on twitter for nearly ten years. During this period, he has sent more than 15000 tweets, including but not limited to playing tricks, serious discussion and hype.
However, musk has always criticized twitter for not abiding by the principle of freedom of speech. In his view, twitter “can neither promote nor serve freedom of speech”.
After taking a 9.2% stake in twitter, musk also launched a vote: “do you want to add an edit button to twitter?” All signs make the outside world think that the technology tycoon can’t stand the bad experience of Twitter and is ready to end up and transform the platform.
At last week’s Ted conference, musk said frankly, “what I want to say is that this is not a way to make money. But I feel that if there is a public platform that can be trusted and inclusive to the greatest extent, it is very important for future civilization. As for those numbers, I don’t care.”.
He said he didn’t want to make money, but musk had already made a lot of money. Maybe this is just a show of musk, the classic operation of speculation and cash out. From the left hand to the right hand, he can release a few virtual coins for Tesla.
For example, in this acquisition of twitter shares, musk spent $2.89 billion to acquire 734869 million ordinary shares, but with these waves of speculation, the value of these shares has risen to $3.38 billion. In less than a month, musk made a profit of nearly 20% in this transaction.
On the contrary, this makes market observers doubt whether the much publicized acquisition is true or the same as in the past. It is just a storm of public opinion set off by musk. As of Friday’s close, twitter shares fell 1.68% to $45.08.
On the other hand, Musk’s competitors are also gearing up. According to sources, Thoma Bravo, an American private equity company that mainly invests in technology, has contacted twitter and expressed interest in making a takeover offer.
