The farce of Musk’s acquisition of Twitter has a new development. Last week, Musk announced the cancellation of the original Twitter acquisition.
In Musk’s letter to Twitter, filed with the Securities and Exchange Commission, he accused Twitter of making ” false and misleading statements ” about the vast number of fake accounts on the platform. Musk has accused Twitter of failing to comply with its obligation to provide him with data and information for business evaluations.
Musk’s attorney, Mike Ringler, wrote: “Twitter sometimes ignores Mr. Musk’s requests, sometimes rejects them for seemingly unreasonable reasons, and sometimes claims to comply with requests while giving Mr. Incomplete or unusable information.”
But such reasons are unlikely to get Musk out of the way, and he faces a potentially protracted legal battle that could cost him at least $1 billion in termination fees , according to a new filing with the U.S. Securities and Exchange Commission.
Sure enough, Twitter on July 12 sued Musk for breach of an acquisition contract , calling his exit strategy a “model of hypocrisy” and asking him to buy the social media company for $44 billion.
How did the three-month-long Twitter acquisition turmoil get to the point where it is now?
Twitter takeover turmoil
Musk’s plan to acquire Twitter is not “a roar when the road is uneven, and when it’s time to acquire,” in fact, as early as January 31 this year, Musk had already secretly purchased Twitter shares. By March 14, Musk had amassed more than 5% of his shares, but instead of disclosing his investment to the SEC as required, he began his public criticism of Twitter.
The first shot was on Twitter’s algorithm. He felt that the bias of Twitter’s algorithm would have an incalculable impact on the public .
Musk’s Sharp Comments on Twitter Algorithms | Twitter
On March 25, Musk followed up with a poll asking everyone if Twitter had freedom of speech. More than 2 million people participated in the vote, and nearly 70% of the participants chose no. Musk went on to argue that Twitter’s actions undermined democracy, and felt that people might need a new platform.
Does Twitter abide by free speech? | Twitter
Despite Musk’s ostensible bombardment of Twitter, he has been secretly advancing his acquisition plan.
On April 4, Musk announced that he had successfully acquired a 9.1% stake in Twitter for $2.64 billion on March 14, becoming Twitter’s largest shareholder . After the news became public, Twitter’s shares experienced their biggest share price gain since its initial public offering, rising as much as 27% during the session.
On April 5, Twitter invited Musk to join the company’s board of directors, on the condition that Musk would not hold more than 14.9% of the shares, which was accepted by Musk. On April 10, before Musk’s appointment went into effect, Musk made several more tweets critical of Twitter and rescinded his decision to join the board. Clearly, Musk has bigger ambitions for Twitter.
On April 14, Musk announced the acquisition of Twitter for $54.20 per share, for a total price of $44 billion . At first, Twitter’s board announced a “poison pill” to block Musk’s takeover, allowing shareholders to buy additional stock in the event of a hostile takeover. But on April 25, Twitter had to accept Musk’s offer.
However, things are not so simple. The acquisitions that were reached after rounds of wars of words were finally “eaten up” by Musk. On July 8, Musk announced the cancellation of the original Twitter acquisition .
Musk’s pie for Twitter
According to a May 6 report by The New York Times, Musk presented investors with his ambitious Twitter plans and his financial goals. Musk’s report says he wants to quadruple Twitter’s revenue to $26.4 billion by 2028. Also reduce Twitter’s reliance on advertising to less than 50% of revenue.
Twitter is set to make $15 million from payments in 2023, growing to about $1.3 billion by 2028. Given Musk’s success with Paypal, Twitter may also have a WeChat-like payment feature.
By 2028, Musk claims he will have 931 million Twitter users. At the same time, he will also launch a new subscription service. This mysterious service is not named, and is temporarily referred to as X. While the document doesn’t elaborate, Musk has hinted that the service should be ad-free Twitter. The subscription will launch in 2023 and is expected to have 9 million users a year.
In addition, it is the layoffs that Twitter employees are concerned about. By 2025, Twitter is expected to have 11,072 employees, the documents show. While Twitter currently has only about 7,500 employees, according to Musk’s forecast, the number of employees will increase to 9,225 in 2022, before falling to 8,332 in 2023. In other words, Twitter in 2023 will usher in nearly 900 layoffs.
Musk distributed a promotional material to investors outlining his grand plans for Twitter | Reuters
Learn WeChat, delete bot, Musk’s new Twitter
In just a few months after reaching an acquisition agreement with Twitter, Musk has had enough of the CEO’s addiction, and every time he proposes to make a big move to rectify Twitter, it will be a hot search. The thoughts he has moved in the past few months are:
01
Open source algorithm, rectify Twitter
After Twitter accepted the acquisition deal proposed by Musk, Musk tweeted that his first plan after acquiring Twitter was to open source the Twitter content source ranking algorithm to ensure fairness. He also plans to remove spam bots and authenticate all real users . He would also add an “edit” button to Twitter and voted democratically on the proposal.
According to the US business media Business Insider, Musk also plans to transform Twitter’s headquarters in San Francisco into a homeless shelter. He claimed that “Twitter employees don’t come to work in the office anyway.” Six hours after Musk released the poll, an overwhelming majority of users voted to turn Twitter’s headquarters into a shelter: about 91 percent of the 912,867 votes voted “yes.”
02
Learn WeChat, learn Douyin
On June 16, Musk was 10 minutes late for his first Twitter staff meeting, and even though he casually picked up his phone to join the meeting, the remarks he gave showed his initial vision for Twitter. In a video conference, he told Twitter employees that if the company is to achieve his goal of reaching 1 billion users, it needs to become more like WeChat and TikTok.
Musk’s first Twitter staff meeting | Twitter
Musk sees WeChat as China’s super-app, merging social media with payments, games, and even ride-hailing. “There is no equivalent of WeChat outside of China. In China, you basically live on WeChat. If we can reproduce this with Twitter, we will be a huge success,” Musk said in a video conference.
He also praised TikTok’s algorithm for not being “boring.” “We can make Twitter fun in the same way,” he said. “I think Twitter can do a better job of communicating serious topics to the masses.”
He also mentioned the topic of freedom of speech that he was most concerned about before, “it can be done without prohibition by law”, and people can say what they want to say. Musk also hopes that Twitter employees can work in the office, but excellent employees can also work remotely. I don’t know if Tesla’s 40-hour-a-week mandatory remote work requirement will be repeated on Twitter in the future. carve……
When asked what Twitter’s success could look like in five to 10 years, Musk said Twitter should ” contribute to a stronger, longer-lasting civilization that allows us to better understand the nature of reality. ” .
03
Iron Fist, delete bot account
Musk has been paying close attention to Twitter’s bot bot issue since its acquisition, and despite Twitter’s long-standing claim that it has only 5% of its bot users, Musk believes that number may be more than 20%.
On May 13, Musk put a hold on the acquisition over Twitter’s bots, warning Twitter that his takeover could be canceled because of the bots. Too many bot users can affect Twitter’s advertising revenue, and it is necessary to remediate bot accounts for the company’s financial health.
Musk did not trust the investigation that Twitter submitted to him, and he requested access to Twitter’s internal repository so he could arrange his own analysis. Twitter’s non-cooperation also became the reason for his final termination of the acquisition.
Musk repented, maybe he wanted to lower the price
Originally, Musk’s offer to buy Twitter at $54.2 per share, or about $44 billion in total, was considered too low, as Twitter traded above $70 per share last year, but since the deal, technology stocks and the entire U.S. stock market have The markets all fell sharply. Twitter shares were trading around $37 as of the close on July 8 — down nearly 30% from the day Musk announced the acquisition .
So Musk’s showdown this time may be because of “expensive buying”. It is not impossible to re-acquire after the price reduction. Some Wall Street analysts said that after Musk’s tossing, morale within Twitter is now low, and Twitter’s board and management should consider accepting a lower purchase price to avoid damage in the long legal battle. Talent can’t even be sold at a low price in the end.
Angelo Zino, an analyst at CFRA Research, said: “It’s impossible to close the deal at the original price of $54.2. Either drop the offer by 15% to 20% and get Musk to re-sign, or watch him Keep playing the robot card.”
No matter how chaotic Musk’s actions on Twitter, there seems to be only one goal: not to buy Twitter for $44 billion. Musk and Twitter’s “love and kill”, I don’t know how it will end.
references
[1] Isaac, M. (2022). Inside Elon Musk’s Big Plans for Twitter. Nytimes.com. Retrieved 1 July 2022, from https://ift.tt/tHxwEol.
[2] Hartmans, A. (2022). Elon Musk abruptly stopped tweeting last week, and no one knows why. Business Insider. Retrieved 1 July 2022, from https://ift.tt/jLwPkvA.
[3] Heath, A. (2022). Elon Musk tells employees he wants Twitter to be more like WeChat and TikTok. The Verge. Retrieved 1 July 2022, from https://ift.tt/nfdHL5R.
Author: Shakespeare Billy
Edit: Flip
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