Business | Social Media
Elon Musk Just Bought Twitter. What Changes Should You Expect?
A finance guy on the future of this social media giant.
As I write this, various hashtags about the death of Twitter are trending.
Elon pulled it off and bought Twitter for $44 billion. What does this mean for the future? And how did we get here?
I’ve been a long-time investor, user, and student of the platform. Here are my predictions.
How we got here
The board initially rejected his offer and enacted a poison pill strategy, which allowed it to shop around for alternative buyers.
They didn’t find a better buyer. And in the meantime, Musk came forward with his financing solidified via an SEC filing: he had $46.5 billion, including $21 billion in his own equity (cash) and $25.5 billion in debt via Morgan Stanley.
This put the board in a position where they had to take the offer more seriously.
The board has a fiduciary duty: If they don’t act in the best interest of the shareholders, they have liability and could be sued. They could also take tremendous damage to their professional reputation.
Congressional Republicans were already threatening a probe of the transaction given Musk had made such a strong offer.
Upon accepting the offer, Twitter’s board spokesman, Bret Taylor, released a statement, “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Who is losing their jobs
Everyone on the board will go away. Because Musk is taking ownership, there is no longer a need to represent the public ownership.
Musk will likely appoint another board of advisors. He still needs experts from the field to advise on the future of the company. However, they won’t have the power to take him to task and remove him.
