Compared with the image of a tech madman, Musk on Twitter is particularly outrageous, especially his many speeches involving Tesla stocks and Dogecoin, which are considered to be suspected of manipulating the capital market. The acquisition of Twitter will undoubtedly further release his ambitions, continue to build his own personal IP, and even bypass supervision. While Musk was concentrating on Twitter, after the U.S. stock market opened on April 26, Tesla’s market value evaporated by $120 billion, enough to buy 2 Twitters.
After just ten days of resistance, Twitter complied and agreed to Musk’s acquisition plan.
On April 14, Musk formally proposed to acquire Twitter, the world’s largest microblogging company, which launched a “poison pill” plan to resist. Ten days later, “the objection was invalid,” Twitter announced that it would accept Musk’s takeover offer for a total of $44 billion, or about 288.5 billion yuan.
Twitter is the most commonly used microblogging platform in American society and the overseas originator of Sina Weibo, while Musk is the most active entrepreneur on Twitter and one of the users with the largest number of Twitter followers – he has more than 8,000 followers. million twitter followers. This acquisition is probably equivalent to Wang Sicong, who has been active on Weibo all the year round. Because he couldn’t understand the comments on Weibo, he bought Weibo backhand.
As the most famous tech madman in the world, Musk can be said to be the idol of the entire tech industry. He sends satellites, builds star chains, makes brain-computer interfaces, builds electric cars, and makes vacuum high-speed rails to satisfy all the fantasies of the technology industry. “Silicon Valley Iron Man”. But now, his mind is more on Tesla’s stock price and acquisition Twitter, and such Musk has become more and more “vulgar”.
At the same time as Musk’s “single-hearted push”, U.S. technology stocks are going through a slump. On April 26, eastern time, the three major U.S. stock indexes fell across the board, and all large technology stocks fell, with Tesla leading the decline by 12.18% , evaporating $120 billion in market value overnight.
Since Musk announced the acquisition of Twitter, according to Musk’s 17% stake in Tesla, his Tesla stock has shrunk by $42 billion.
Taking stock to make Twitter
In fact, the fight has been going on for almost a month, during which time Musk ran a successful hunt for Twitter.
The matter began at the beginning of this month. On April 4, the US Securities and Exchange Commission (SEC) disclosed documents showing that Tesla CEO Musk quietly bought a 9.2% stake in Twitter, becoming its largest shareholder. Shares of Twitter soared more than 27% after the filing was disclosed.
As a purely public company, Twitter doesn’t have the AB stock design common in tech companies, and founders and executives don’t have supervoting power. Moreover, Twitter’s equity is very scattered, and there is no single major shareholder. According to Twitter’s public information at the end of 2021, its largest shareholder previously held only 8.8% of the equity. Against this backdrop, it took Musk just two months to become Twitter’s largest shareholder by buying shares from the public market.
After buying enough shares to become the largest shareholder, Twitter announced on April 5 that Musk will join Twitter’s board of directors as one of its management, but as a board member, Musk will be limited to holding no more than 14.9 % of the shares.
Within days of the announcement of the plan, Musk once said he would accept the appointment, but on April 11, according to Twitter CEO Parag Agrawal, Musk rejected a request to join Twitter’s board of directors. Outside speculation, Musk may be seeking greater control.
Sure enough, two days later (April 13, U.S. time), according to documents submitted by Twitter to the U.S. Securities and Exchange Commission, Musk officially made a takeover offer and planned to fully acquire Twitter at a price of $54.2. At $43 billion, the purchase price is 38% higher than Twitter’s closing price on April 1. Musk also said that the offer is the highest offer and the final offer, and no room for bargaining is accepted.
While proposing the acquisition, Musk has since ramped up his criticism of Twitter last month, claiming the company’s algorithms are biased, the feed is flooded with automated spam posts, and Twitter’s user growth has been reported. exaggerated by machines. Musk believes that the existing model has been unable to maintain Twitter’s rapid development and social responsibility, and the company must be privatized.
In addition, Musk, as the largest shareholder, “threatened” that if Twitter did not accept the acquisition, Musk “will reconsider the status as a Twitter shareholder.”
This means that if Twitter rejects the acquisition plan, Musk may sell Twitter shares in the open market, causing Twitter’s stock price to fall, which has risen from around $39 in the past two weeks. To around $50, the rise was nearly 30%.
In the days since, Musk has also met with a slew of Twitter’s institutional investors to pressure the board.
On April 14, US time, according to the “Wall Street Journal”, citing people familiar with the matter, Twitter is considering a “poison pill plan” to block Musk’s acquisition of the company. The plan, also known as “equity dilution anti-takeover measures”, is a defensive measure for the acquired company to resist hostile takeovers. It was invented by the famous American lawyer Martin Lipton in 1982.
Under the “Poison Pill Plan”, when the acquired company encounters a hostile takeover, especially when the other party’s shares have reached a certain proportion, it will issue a large number of new shares at a low price to dilute the other party’s equity and increase the acquisition cost to prevent the acquisition.
But the plan didn’t go well enough to stop Musk. Just ten days later, Twitter’s board of directors, uncharacteristically, began supporting Musk’s acquisition plan. According to the British “Independent” on Twitter on April 25, Twitter will accept Musk’s takeover offer. As for the reason for the reversal of the board’s attitude, it is speculated that the pressure from institutional investors may have played a role, or that Musk’s acquisition strength has been recognized by Twitter.
It’s time for Musk to show off his financial skills.
Just last week (April 21), Musk showed a financing arrangement of about $46.5 billion in a statement to demonstrate his acquisition capabilities. Musk has set aside $25.5 billion in debt and margin loans for the acquisition, as well as about $21 billion in personal funds, according to the statement.
Subsequently, Twitter announced that it had accepted Musk’s acquisition agreement. According to the agreement, Musk will acquire Twitter at a price of $54.2 per share, for a total of about $44 billion-a slight difference from the original $43 billion valuation. It may be due to a difference in how the number of shares is calculated, rather than a change in share price. The deal was unanimously approved by Twitter’s board of directors and is expected to close this year.
Musk said on Twitter that he hopes that after the acquisition, Twitter will continue to provide a platform for people to express dissent. “I hope that the harshest criticism of me can also stay on Twitter.” In addition, Musk also hopes to make Twitter’s algorithm public to be transparent about the specific logic of platform content recommendation and blocking.
80 million followers Twitter big V
Today, although the story of “Silicon Valley Iron Man” has long been over-consumed, Musk still maintains his consistent image of “tech madman” in the hearts of many technology enthusiasts.
Musk’s current companies include Tesla, the world’s largest electric vehicle company, SpaceX, a private rocket company, Solar City, a solar energy company, Neuralink, a brain-computer interface company, The Boring Company, an underground tunnel company, and the non-profit organization OpenAI. Without exception, they all revolve around the commercialization of cutting-edge technologies, focusing on hard technology, AI and artificial intelligence, but never involving the consumer Internet.
Compared with the image of a tech madman, Musk on Twitter is a bit floating, especially his speeches involving Tesla stocks and Dogecoin many times. investigation. The acquisition of Twitter will undoubtedly further release his ambitions, continue to build his own personal IP, and even bypass supervision.
Musk has more than 80 million followers on Twitter, where he discusses his companies, expresses his views on the new crown epidemic and the future of mankind, and also attracts an investigation by the US Securities and Exchange Commission for his remarks involving capital markets.
In recent reports, Reuters called Musk a “successful but sometimes capricious entrepreneur,” citing misleading tweets by Musk, including a 2018 one about taking Tesla private. Joking statement.
On August 7, 2018, Musk announced on Twitter that he was going to take Tesla private at a price of $420 per share, and said that the funds had arrived, which caused Tesla’s stock price to skyrocket. Half a month later, Musk announced that he would abandon Tesla’s privatization, and Tesla’s stock price fell. The incident led to an investigation by the SEC, which eventually resulted in Musk resigning as Tesla chairman and paying a $20 million fine.
In addition, some of Musk’s remarks about Dogecoin and new coronary pneumonia also caused controversy. For example, Musk discussed the cryptocurrency Dogecoin on Twitter several times in February 2021, and then the price of the cryptocurrency rose by 60%, reaching a market value of $10 billion, which also led to an investigation by the United States Securities and Exchange Commission.
The announcement of the acquisition of Twitter, some of Musk’s remarks also caused a lot of controversy. Although he has repeatedly claimed that the acquisition is not for making money, but for better protection of freedom of speech, this does not change the essence of this commercial acquisition, especially in the early stage of his behavior of buying original shares at a low price, which was invested by the United States Those who believe that someone is suspected of artificially driving down the stock price.
In fact, Musk showed his potential as a capital trader when he took a stake in Twitter last month, before the April 25 acquisition. As early as March 14, Musk bought 9.2% of Twitter’s shares at a price of only $33, and within half a month, he made a profit of more than 50%.
According to the requirements of US securities laws, investors who buy more than 5% of a company’s shares should disclose information within ten days after the transaction, but Musk announced it 10 days too late. Shareholders of Twitter had previously filed a lawsuit against Musk, claiming that his delay in disclosing his shareholding had artificially lowered the stock price, but this news has been diluted in the subsequent overwhelming acquisition discussions.
It should be noted that although this acquisition transaction has been finalized, it still needs to be approved by the general meeting of shareholders, released by the U.S. regulatory authorities, and other relevant conditions have been passed through layers of meetings, and it is not completely settled.
However, compared with other Internet giants, Musk has never been involved in social media before, and his company does not compete with Twitter, so the deal will not touch antitrust scrutiny, which increases the chances of a successful deal.
Although already the richest man in the world, Musk’s net worth is mainly concentrated in Tesla’s stock value. Although the acquisition of Twitter may not bring direct commercial benefits to Musk in the short term, for Musk, who is good at trading stocks and coins on Twitter, the inclusion of Twitter will undoubtedly allow him to be involved in the capital market. Speech is more unrestricted.
After the announcement of Musk’s acquisition of Twitter on April 25, the currency circle has already been in a carnival. Dogecoin, which has been on many platforms by Musk before, has risen first, and its price has risen by 30% on the 26th.
Twitter’s Spring, Less Important
Regarding the impact of Musk’s acquisition of Twitter, a Twitter employee directly asked on Twitter: “Who can tell me, will I get rich or be laid off?”
Because the Twitter platform has a large number of employees who are responsible for content moderation, and if Musk tends to deregulate the Twitter platform, it may mean that many employees responsible for content moderation are at risk of being laid off.
In response to this question, Twitter CEO Agrava replied that Twitter under Musk’s governance will not lay off employees, and the compensation system will remain basically unchanged. After the transaction is completed, the stock options in the hands of employees will be converted into cash. But he also said that Musk is the decision maker of the future.
More worrying for the market than employee benefits may be the future prospects of the Twitter platform. Twitter’s revenue structure is very simple, with advertising service revenue accounting for more than 80%. Many investors worry that after Musk’s acquisition of Twitter, the platform may be more open to speech, which may further hit Twitter’s advertising revenue.
The acquisition of Twitter may be a good deal for Musk, but this does not change the status quo of the long-term sluggish value of Twitter itself. Although it has a strong public opinion influence in the United States, and even deeply involved in the US election, Twitter has always been a platform with more influence than commercial value.
Twitter is indeed a business that doesn’t make money. As a 16-year-old American Internet company, Twitter’s revenue in 2021 is only $5.08 billion — less than one-twentieth that of another social giant, Facebook, with a net loss of $221 million.
For comparison, Sina Weibo, which has a similar model to Twitter, will have a revenue of $2.26 billion in 2021 and an adjusted operating profit of $829.2 million. Although Twitter’s revenue is larger than that of Weibo, in terms of profitability, Twitter Te is far from making money from Weibo.
The problem that Twitter doesn’t make money has been going on for years. In 2013, Twitter went public. According to its prospectus, Twitter’s revenue in 2012 was $319 million, with a net loss of $79.4 million.
In addition, Twitter’s user count has been stagnant for years. According to official data, Twitter has 217 million monthly active users in 2021, and is expected to exceed 315 million monthly active users by the end of 2023. But in fact, as early as June 30, 2013, Twitter’s monthly active users reached 218 million. In the past nine years, Twitter’s monthly active users have basically been in a state of zero growth.
Also using Weibo as a comparison, as of the end of the fourth quarter of 2021, Weibo had 573 million monthly active users and 249 million daily active users. Weibo is currently mainly aimed at the Chinese market, while Twitter is aimed at the entire English-speaking world, but Weibo’s monthly activity is twice that of Twitter.
Poor performance and stagnant growth have led to Twitter being left out in the capital market for a long time. In 2021, Twitter ranks among the top ten worst-performing technology stocks in the S&P 500, with its share price falling 18% for the year. The company’s co-founder and former CEO Jack Dorsey also announced his resignation at the end of 2021.
According to the plan, Twitter was originally expected to release its earnings report on Thursday. The market believes that it is likely to be related to the poor business data of Twitter. It is worried that the stock price will fall after the earnings report is released, so the management will rush to finalize it with Musk before this Thursday. acquisition plan.
Musk’s acquisition of Twitter does not change the company’s long-term sluggish revenue and difficult growth. On the contrary, most mainstream American media believe that Musk may relax Twitter’s censorship of extreme remarks. In the United States Under the Internet’s extreme spectrum of public opinion, this may further fuel hatred.
For Twitter, after being officially acquired, if it is completely transformed according to Musk’s existing plans, the entire platform will undoubtedly be placed in a more dangerous situation. At that time, it may not be just Musk who was investigated back and forth by the SEC.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/compared-with-the-image-of-a-tech-madman-musk-on-twitter-is-particularly-outrageous-especially-his-many-speeches-involving-tesla-stocks-and-dogecoin-which-are-considered-to-be-suspected-of-manipula/
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