Elon Musk – the richest man in the world - is known to make headlines often. Space flights to Mars missions and now on to Twitter, the musk-buzz is quite omnipresent. Elon Musk has many jobs to juggle. He is the founder, CEO and Chief Engineer of SpaceX, CEO and product architect of Tesla, Inc. In addition, Elon Musk is also the founding member of The Boring Company and X.com (part of PayPal) Co-founder of Neuralink, OpenAI, Zip2, and President of the Musk Foundation. As Musk remains at the center of innovation and technology as well as controversy, what he is also looked up for are his rather interesting tweets. Elon Musk’s Twitter personality can be erratic and ranges from politics to business to promotions. Elon Musk has a personal interest in Twitter and wishes to buy it completely. Some even say that Elon Musk's vision is to restore Twitter’s “long-lost glory”.
A reason for this can be Twitter’s intense scrutiny and seriousness as a public platform. Musk was once charged with fraud in 2018 after tweeting about having funds to take Tesla private at 440 dollars a share, which led to him stepping down as Tesla's chairman for three years and paying a twenty-million-dollar fine. It seems that Musk has a vision of what Twitter should and should not have, particularly the Edit Button. Musk has been attracting attention by speculating whether the platform adheres to free speech principles. Musk had also started a poll on Twitter where he had asked to vote if Twitter adheres to the ‘free-speech’ principles. 70% of the people who participated didn’t think that was the case. What followed was an announcement on April 4 that Elon Musk had acquired a 9.2% share in the company for about 2.3 billion dollars. This bid also won him the title of one of the biggest shareholders of the platform. Elon Musk later announced his surprise $43 billion offer to buy 100 per cent of the company and turn it into a private entity. One could see Elon Musk’s Twitter acquisition as revenge, the reclamation of a rich-disgruntled fan. This has stirred up the Twitter board, which issued a defence tactic to delay Elon Musk’s voracious attempt to take over the company. Parag Agrawal, Twitter's chief executive, announced Mr. Musk's appointment to the company's board on Twitter. The condition of the offer was that Twitter's ownership stake could not exceed 14.9%.
However, Musk had more ideas up his sleeve. He declined the board seat and demanded the ownership offer be considered. Currently, in Twitter’s defense tactic, the strategic plan is to buy time, engage in negotiations, attract any other investors, and wait for developments. An interesting fact is that Twitter’s rights plan expires in April 2023. Twitter has stated the rights will become exercisable if an entity, person, or group obtains 15% or more of the outstanding common stock of Twitter.
In wake of this policy, Musk’s stake reduces and hence the plan acts as a deterrent to what Twitter sees as a manipulative bid. To understand this better, let’s assume that the rights plan gives Musk (an acquirer) the chance to own 15% of the company share while there are 100000+ shares available. In such a case Musk is limited to his 15% share while the other stakeholders can enjoy a much larger percentage.
On April 21, 2022, Musk announced that he had received $46.5 billion in financing commitments. According to him, he's considering a hostile takeover that would involve making an offer directly to Twitter shareholders. This trick is known as a tender offer.
Currently, the Twitter bid is in negotiations with big players predicting, pre-empting and awaiting what unfolds.