Elon Musk Twitter offer Explained!

Elon Must recently announced his intention to buy 100 percent of Twitter and take it private, making him the sole owner of the company. 

Let's take a look at what the whole thing is and what it means🥸.

Elon is currently Twitter's largest shareholder, owning 9.2% of the company. Despite this, he refused to serve on the company's board of directors because doing so would limit his shareholding capacity to ~15%. He then proceeded with his bid to completely acquire Twitter. Elon has offered to buy Twitter for $54.20 per share, which is significantly higher than the $48 price at which Twitter shares rose when Musk announced his offer.

But why does Elon Musk want to buy Twitter?

All said and done, why would Elon be interested in a social media platform? After all, he is the (known) richest man in the world. Well, considering how much power social media platforms command, I’d say it’s a pretty smart business move for him. Okay, enough with the speculations.

Let’s look at his ‘declared’ reason for buying Twitter👇

Twitter is a platform for free expression. Elon believes that the most recent moderation rules implemented by Twitter make it difficult for people to express themselves freely and fearlessly. He wants to own Twitter and take it private to protect the sanctity of free speech on the platform. He says he is not looking to make money from Twitter, instead he wants to buy it as a service for public good. By acquiring Twitter, Musk wants to increase the public's trust in the platform and make it a place for true inclusivity and freedom of speech.

However, my question is, if Elon owns Twitter completely, who will ensure that he himself follows those principles?!🤔

Anyway, moving on...

What does Twitter have to say about it?

In response to the 'hostile' takeover, they have implemented a 'poison pill strategy.'💊

What is the 'Poison Pill strategy'?

It is an investment term in which a company, in order to avoid an unwanted takeover, takes a step that makes the company less appealing to the person/company interested in purchasing it. However, this step is also detrimental to the company.

Usually, Twitter shareholders can own maximum of ~15% of shares each. But, in this case, Twitter has allowed its shareholders to purchase additional Twitter shares at lower price. Bluntly put, the more shares are bought by shareholders, the more Elon will have to pay to buy these shares from them.

What will happen if he is unable to buy Twitter?

There are many speculations about it in the market. But we will not get into them. Here is what we know.

Musk is Twitter's largest shareholder and unarguably, one of the biggest influencers on the platform.

He has stated that if he is not allowed to purchase the platform, he will have to reconsider his position as a shareholder, which could result in a significant loss for Twitter and a ripple effect on the stock market.🤯

What do people think?

Elon recently conducted a poll on Twitter:

83.5% of users agreed with Elon's point of view, which is a sizable number. He is currently one of the most powerful social media influencers. His word can make or break a company.

If such a large number of people side with him, it is definitely a matter of concern for Twitter.

What happens next is on Elon and Twitter but do let us know what you think will Elon do in response to the poison pill.

Stay Tuned for our next blog!