How Elon Musk takeover twitter ? Forced $44 Billion Deal..!!

World’s richest man, Elon Musk, paid $44 Billion, to buy one of the most famous social media platforms in the world – Twitter. The first thing Musk did after the purchase, was to fire CEO Parag Agarwal. Along with him, a large number of Twitter employees have been fired. Let’s Discuss how Elon Musk takeover twitter. Mystery behind forced $ 44 Billion Deal.

Elon Musk has claimed, that Twitter has now been set free. People will have more freedom of speech on it. In his own words, his biggest agenda is to allow free speech.

“And it will be a public platform that is maximally trusted and broadly inclusive it is extremely important the future of civilization.” – Elon Musk

He wants to bring a revolution of freedom to Twitter, and end all biases. This might make you think that Elon Musk loves Twitter. This might be true to some extent but do you know Twitter sued Elon Musk After which, eventually, Elon Musk was forced to acquire Twitter. The backstory is quite interesting.

“After months of legal drama, Elon Musk has completed his $44 Billion deal to buy Twitter.”

“And wasted no time overhauling basically everything about the company.”

“Reorganising the whole company, firing people, unfiring people, the biggest new project is getting all the verified accounts to pay $8 a month for the Blue Check.”

“Experts will tell you, Twitter is super influential. And it does say something about the world we live and how it works.”

Elon Musk takeover twitter : Complete Story

Story begins on 31st January 2022, when Elon Musk purchased shares in Twitter for the first time. Over the next couple of months, he steadily kept buying more shares, and increasing his stake in Twitter. But at this point in time, the people didn’t know he had a stake in Twitter. This was a secret. By 14th March, his stake had crossed 5%. According to America’s Securities and Exchange Commission (SEC), when the stake in a company exceeds 5%, this needs to be disclosed to the SEC, and the public comes to be aware of it. The SEC gives a deadline of 10 days, but Elon Musk missed the deadline.

On 24th March, Elon Musk criticize Twitter on Twitter. He tweets to ask his followers, about their opinion of freedom on Twitter. Whether it supports free speech, and democracy.

“It’s just really important that people have the both the reality and the preception that they are able to speak freely within the bounds of the law.”

At this point, Elon Musk was discussing his ideas with Twitter’s former CEO Jack Dorsey. Initially, Jack Dorsey was seen in support of Elon Musk, because he liked his idea. His passion for the Free Speech. Even though, Jack Dorsey wasn’t the CEO then, Parag Agarwal had already become the new CEO. On 3rd April, Elon Musk shared his ideas with the then Twitter CEO Parag Agarwal, and discussed this with the rest of the Board Members. He asked them to either change Twitter to a Private Company, or that he’ll create a new ‘rival’ social media platform to compete against Twitter.

The next day, on 4th April the world got to know that Elon Musk already had a significant stake in Twitter. He had purchased a 9.2% stake in Twitter and had already become the largest shareholder in the company. After this announcement, the stock price of Twitter went up rapidly.

“Twitter shares: they are surging right now, up a little over 25% this is because Tesla’s CEO Elon Musk, has taken a passive stake in Twitter, of 9.2% of Twitter’s common stock.”

Twitter’s Board Members considered the impact on their company if they made it a Private Company. Or if Elon Musk started a rival social media platform to compete against it. The Board Members offered Musk a seat on the Board on 5th April, and Elon Musk accepted. 4 days later, on 9th April Elon Musk Tweeted, “Is Twitter Dying?” Concerned, Parag Agarwal messaged Elon Musk asking him about the tweet. As the largest shareholder of Twitter, one who was offered a seat of the Board Member, he was still writing against Twitter on Twitter. Within the hour, Elon Musk replied that he would not join the Board. Since it was a waste of his time. “I’m not joining the Board, this is a waste of time.”

By 11th April, he clarified that he wanted to make Twitter a Private Company. Here, you’ll wonder how the text messages between Elon Musk and Parag Agarwal were revealed to the public? Were they leaked? Actually, Twitter had filed a case against Elon Musk that we’ll discuss later, and during the court filings, Elon Musk’s texts had to be made public. Basically, due to the court proceedings, we are able to see these text messages. On 14th April 2022, Elon Musk shocked everyone. He announced his offer to buy the whole company. He offers $43 Billion to buy the company. Why though? Experts argue that Elon Musk is attached to Twitter. But that as a Board Member or a stakeholder, to participate in discussions and waste time, didn’t interest him.

He wanted to take over full control of the platform, so that he could shape Twitter as he wants to. Taking the Company private is an extension of this. The public companies that are listed on the Stock Market, have to be quite transparent and undergo much scrutiny, because as per the law, if a company is listed on the stock market, they will have to share significant details with the public. But these rules do not apply to private companies. If Private companies want, they can hide a lot of things from the public. One thing that you might be wondering, is that when a public company becomes private.

What happens to the public shareholders?

Elon Musk takeover twitter – In such a case, the entity buying the company, has to pay the shareholders. The $43 Billion being offered is calculated to be approximately $54.20 per share. It means that if you had invested in Twitter, you would get $54.20 for each of the shares you held, if the company became private. What was Twitter’s response to Elon Musk’s offer?

Jack Dorsey was elated. The text messages revealed to the public between Musk and Dorsey show that Dorsey was please and supported the notion of Musk purchasing the company. But the texts between the then Twitter CEO Parag Agarwal and Elon Musk weren’t on a happy note. Elon Musk felt frustrated with Parag Agarwal. He was moving slowly with the offer and trying to please people but Musk wanted fast results. Tensions between Elon and Parag kept growing Musk wrote to Twitter’s Chief of Board Taylor “Fixing Twitter by chatting with Parag won’t work.”

20th April, 2022. Elon disclosed his financial sources. The sources of the funds for buying Twitter. It was found that of the $43 Billion, $7 billion was to come from senior secured bank loans. Banks like Morgan Stanley, Bank of America, were ready to give out loans. $6 billion were to come from subordinated debt. $6.25 billion from personal bank loans to Elon Musk, $20 billion would be in cash equity of Elon Musk, that would be in exchange for Tesla stock. And $7.1 billion would be in form of equity from 19 independent investors. Twitter’s advisors, Goldman Sachs and JP Morgan Chase, both agreed to the deal.

On 25th April 2022, Twitter’s Board accepted the offer. For $44 Billion. But while accepting this offer, they had some conditions. Elon Musk couldn’t say anything negative about Twitter or Twitter employees publicly, till the deal was being processed. And if he couldn’t secure the deal, a $1 billion termination fee would be levied on him. It meant that if Elon Musk rescinded his offer after the discussion he would have to pay a fine of $1 billion. According to this deal, Parag Agarwal would get $39 million, and Jack Dorsey would get $978 million. This might sound like a happy ending, Elon Musk’s offer was accepted, Elon Musk would get Twitter, and the other Twitter stakeholders would be happy too.

But on 13th May, Elon Musk suffered Buyer’s remorse. The feeling you get when you go to buy a new smartphone, and after the purchase, you feel like did you even need it? Did you just waste your money? Perhaps you shouldn’t have bought it. This causes you much discomfort. Perhaps Elon Musk was suffering the same. He put this deal on hold. And what was the reason he gave for this?

Elon Musk takeover twitter to said that there were some reports that claimed only 5% of the Twitter users were actually bots. While he apparently believed this to be as high as 20%. He claimed that he was being cheated. People asked him why he didn’t consider it previously? He said that Twitter would have to bring in proof that their estimations were correct regarding the bots. People believed that Elon Musk was facing buyer’s remorse, or that he wanted to bring down the price or was looking for excuses to back out from this deal.

At this point in time, Elon Musk and Parag Agarwal got into a feud on Twitter. Parag Agarwal was tweeting that the company couldn’t get an external review about the bots as it was a threat to users’ privacy. And he listed out the reasons for this. And Elon Musk replied with a poop emoji. It’s interesting to see the world’s richest person talking like how you talk to your friends.

On 17th May, Twitter files new documents with the SEC. They claimed that they had a deal with Elon Musk that he will not say anything negative about the company or its employees, as long as the negotiations of the deal were underway. But what was he doing here? They claimed that to be a breach of contract.

In June, the SEC directed Twitter to provide the data requested by Elon Musk. To provide an estimate of the spam accounts on Twitter. On 7th July, Twitter revealed to the public that every day, 1 million bots were removed from the platform. But at the same time, this couldn’t be investigated by an external agency and that they couldn’t reveal the exact data because if an outsiders mines for this information in the company, it will be a threat to the privacy of the users.

The next day, Elon Musk announced that he would terminate this deal. He backed out of the deal. In response, Twitter filed a court case against Elon Musk on 12th July. Twitter claims that the way Elon Musk was showing uncertainty to the public, it affected the performance of the company. That their revenues were decreasing. Friends, at this point in time, the $1 Billion fee, that Elon Musk had to pay for backing out of the deal, Twitter wanted not only that, instead, Twitter wanted that Elon Musk should execute the deal. He should go through with buying offer. Since he had already breached the contract, by badmouthing the company. This was the beginning of the court case.

On 29th July 2022, Elon Musk filed a court case against Twitter claiming that Twitter didn’t publicize the details. That Twitter misled its investors but floating a false number of spam and bot accounts. Here it is important to mention how important it is to be a good leader while undertaking such deals. It is important to have negotiating skills. For this, I’ll like to recommend two books here. 1st: The Art of Negotiation. And 2nd: The Leader in You. It’s on leadership.

23rd August 2022, a new player enters the story and Elon Musk found a new excuse. Peiter “Mudge” Zatko’s whistleblower report was revealed to the world.

“Accusing that Twitter falsely claimed it had a solid security plan, and that he had warned colleagues that half the company’s servers were running out-of-date and vulnerable software.”

Who is Peiter “Mudge” Zatko?

He was Twitter’s previous Head of Security. He was fired in January 2022, for poor performance.

On 6th July, After teaming up with a Non-Profit Organisation Whistleblower Aid, lodged a complaint against Twitter with the US Justice Department of Federal Trading Commission, He claimed that Twitter followed unethical safety practices and their content moderation policies do not align with the laws of the country. And that Twitter had misled Elon Musk by showing him fake bot numbers. Zatko also claimed that Twitter has to look out for a threat from foreign agents. A Chinese agent was mentioned and how the company was under pressure to employ an Indian. Twitter responded to it by saying that Zatko was a furious ex-employee angered over being fired.

“Zatko was fired in January for ‘ineffective leadership and poor performance.'” And that he was trying to create a false narrative, by making false accusations against them.

Elon Musk saw an opportunity and sent the second termination letter to Twitter. Elon Musk said that the first termination letter sent by him and the reasons mentioned therein about the irregularities in the bot numbers, remain valid, and that in addition to it, was the second termination letter with the reasons being the allegations made by Zatko. Due to this, he didn’t want to go through with the deal. During this time, the messages from Elon Musk which were leaked revealed that Elon Musk was trying to back out of the deal due to the concerns about World War III. He was worried that World War III might erupt.

The Senate Judiciary Committee of America, agreed to listen to Zatko’s allegations on September 13th. 4 days before that, on 9th September Elon Musk sent his third termination letter. Citing the third reason why he didn’t want to go through with the deal with Twitter. Once again, he referenced the 2 previous termination letters but just in case, that wasn’t enough to convince people, he wanted to show the third reason why he didn’t want the deal.

On one side, Elon Musk tried to distance himself from Twitter, and on the other, Zatko was coming up with accusations, one after the other. This might sound like bad news for Twitter. But legally, Twitter was in a better position. 3rd October 2022, Elon Musk’s legal team informed him that it would be difficult for them to contest the case. There were no unfavourable changes in Twitter in terms of their business, financial condition, or their valuation. So they didn’t have any concrete reason to reject the deal.

After this conversation, the next day on 4th October, Elon Musk took a U-turn and informed Twitter through a letter that the $44 billion offer for buying Twitter was still applicable. It was interesting that Elon Musk had to appear in court merely 2 days later. Twitter’s lawyers were slated to question Elon Musk. Before that could happen, Elon Musk agreed that his previous offer was valid.

20th October 2022, the employees working at Twitter listed out their worries. The Washington Post reported that 75% of the employees working at Twitter might be fired by Elon Musk. But these employees claimed that before Elon Musk, the Board Members anyhow wanted to fire 25% of the employees by the end of 2023. So they didn’t object to selling the company to Elon Musk. Twitter’s employees wrote an open letter protesting Elon Musk’s takeover of Twitter. They show their disagreement by claiming that it wouldn’t help Twitter in the future.

But on 27th October 2022, this deal was finally closed. Elon Musk officially bought Twitter.

“The Deal is done! Twitter has been sold to Elon Musk.”

“After months of legal battles, and he has changed his Twitter title to Chief Twit.”

“Elon Musk carried a kitchen sink into Twitter HQ this week. Tweeting, “Let that Sink in!”

The news of him firing CEO Parag Agarwal broke out instantly. Additionally, the CFO, Chief Legal Officer and the General Council were also fired Security came and escorted them out. Elon Musk became the new CEO of Twitter. And put his plans for Twitter in front of the public. They were truly shocking.

First, he shared his idea that he wants to make Twitter like the Chinese app WeChat. Not only can people Tweet on it, but also people would be able to chat on it, video call each other, play video games, and even make payments. One app for it all.

The second plan that he revealed was that the blue tick marks that you see on Twitter, that are normally given to famous and notable people, he said that he would give the tick marks to everyone at the cost of $8 per month. That’s right. He is literally trying to sell the blue tick marks.

Elon Musk claims that this will be a new source of revenue for Twitter. But the critics claim that since Elon Musk spent a large amount on Twitter, he wants to recover it somehow. He is left with no other source, so he’s trying to draw money from anywhere he can, by making any feature ‘paid’. By trying to include a payment system on it, adding video games to the app.

As a public company, since 28th October Twitter was delisted from the New York Stock Exchange. Since then, Twitter is now a private company. Musk said that he will create a new Content Moderation Council, which will work to handle free speech.

Elon Musk takeover twitter to feels passionate about Free Speech. The people who had their accounts suspended permanently such as Donald Trump, he wants to revoke the suspension. Even though Donald Trump approves of Elon Musk’s efforts, he said that he wouldn’t rejoin Twitter. Because he has his social media platform. Truth Social. Interestingly, when Elon Musk was backing out of the deal to buy Twitter, Donald Trump criticized his accusation by calling it rotten. Elon Musk replied, “Time for Trump to hang up his hat and sail into the sunset.” We will have to wait and see what Twitter’s future looks like.

One thing that’s being reported for sure, that Twitter will fire at least half of its employees to cut costs. Apart from this, the issue of the Freedom of Speech will not be an easy task for Musk. Where should the line be drawn between Free Speech and Hate Speech?

After Elon Musk takeover twitter, there has been an increase in the number of tweets that are hateful, pro-Nazi, and discriminatory against women. Basketball star LeBron James expressed concern over this saying that “unfit people saying hate speech is free speech.” Strictly from the business aspect, Elon Musk plans to take Twitter’s revenue to $26 Billion by 2028. Whereas, as of last year, it was at $5 Billion. He claims that his goal is to have 931 million users by 2028, whereas there are 217 million users on Twitter now. To enable an expansion of this scale, he may try to shape Twitter like Tik-Tok.

Elon Musk takeover twitter – on 31st October, he tweeted a poll, to see if people wanted to bring back Vine to Twitter. Vine used to be a social media platform that was integrated similarly to Twitter. On it, people could post video clips of up to 6 seconds. After getting to know these, What do you think about it? Will Elon Musk’s outlandish ideas make Twitter better? Or will it worsen?

Comment below!

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