It’s been a wild month of news for the social network that we collectively love to hate. In early April, Elon Musk took a bite out of Twitter, coming away with 9.2% of the company and plans to exercise his influence over the company through its board. After he backed out of his planned board seat, Musk teed up an even more outrageous plan: He’d buy the company outright and take it private. Absolutely everyone freaked out about this and had an opinion, and some of those opinions cast doubt on the seriousness of the famously unserious tech mogul’s grand plans.
Musk’s $43 billion offer valued Twitter for less than it was trading for a year ago, begging the question: Is this guy for real? We still don’t really know — Musk is mercurial and notoriously prone to big dumb stunts — but apparently he’s cobbling together the cash with some help from Morgan Stanley and Bank of America.
Musk is the world’s richest man, but he’s also relatively cash poor for a mega-billionaire, so making his play on Twitter would require him to cash out shares held at Tesla and SpaceX, the two companies he’s ostensibly running while whipping us all into a frenzy over his totally unnecessary ambitions to buy Twitter and reshape it in his image. Meanwhile Twitter is working to fend of Musk’s advances with a poison pill defense, which would let existing shareholders buy more stock at low, low prices, effectively diluting the company’s shares and pushing the price of his bid up.
As of April 25th, Twitter has accepted Musk's $44 billion acquisition offer. Here's a timeline of how the Twitter acquisition unfolded from start to finish.
A timeline of the Elon Musk-Twitter saga
Before Musk even placed a bid for Twitter, SEC regulators said they have authority to subpoena the Tesla CEO about his tweets and even urged a federal judge not to let the executive get away with tweeting with abandon.
Shortly after U.S. regulators urged a judge to monitor Musk's tweets, the Tesla and SpaceX CEO expressed he was giving serious thought to build the "next Twitter."
Twitter published a note confirming that the SpaceX and Tesla entrepreneur has taken a 9.2% share of the company, working out to around $2.9 billion based on Friday’s (March 4th) share price.
Twitter CEO Parag Agrawal announced that Elon Musk was appointed to Twitter's board in a series of tweets:
I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.
— Parag Agrawal (@paraga) April 5, 2022
Later that same week, Twitter CEO Parag Agrawal announced he would not be joining the social media firm's board. The disclosure from Agrawal follows a series of unusual tweets from Elon Musk over the same weekend in which he wondered aloud to his over 80 million followers if Twitter was dying, citing low frequency of tweets from some of the most popular personalities on the social network.
A Twitter shareholder sued Musk in a federal securities class action lawsuit because Musk failed to disclose his 5% stake in Twitter when he was required to do so. The delay allowed Musk to buy more shares of Twitter at a lower price and cheat sellers of Twitter stock out of increased profits, the plaintiff claims.
The billionaire said he is willing to pay $54.20 per share to buy 100% of the company. It would be an all-cash offer that values the social network at $43.4 billion. He filed the offer with the SEC and tweeted it out hours before he was interviewed on TED.
The controversial CEO of Tesla and SpaceX was already preparing to speak at the TED2022 conference for a conversation that was in such high demand that TED made the livestream available to the public.
9. The following day, April 15th, Twitter's board turns toward the defense everyone anticipated: the poison pill
Twitter’s board of directors announced in a press release that the company is adopting a limited-duration shareholder rights plan — a “poison pill” in merger and acquisition lingo. While the company doesn’t name Elon Musk directly, Twitter is clearly trying to prevent the billionaire from buying the social network.
To summarize: Musk intends to borrow around $13 billion in various fashions; borrow $12.5 billion against his own equity holdings; and pay around $21 billion from his own holdings. It’s a somewhat complicated collection of funding sources, but Musk’s bid is hardly small, so the path to collecting the needed cash in one pile is understandably convoluted.
Twitter’s board met on Sunday to discuss Musk’s offer, and the NYT reports that they then entered into negotiations with Musk early on Monday morning to hammer out additional details, including the timeline for close and what, if any, financial protections Twitter would enjoy were any potential deal to go south post-announcement. Both reports stress that the deal is not yet final and could still fall apart.
Twitter has announced that it has accepted Musk’s offer to acquire the publicly traded company at $54.20/share, valuing the social media platform at $44 billion. Moments after the news broke that Twitter trading was halted, the company issued a press release confirming that it was accepting Musk’s offer to take the social network private.
Elon Musk will have to pay Twitter a $1 billion termination fee if he doesn’t go through with his $44 billion acquisition of the social network, announced on Monday, per a new SEC filing. The filing, which details the terms of the agreement, indicates Twitter would have to pay the same fee under specific circumstances.
Twitter locked down its source code to prevent unauthorized changes, sources familiar with the matter told Bloomberg. The reports say that this change was made to prevent employees from “going rogue” and sabotaging the platform after Elon Musk’s $44 billion purchase of the company. Currently, a vice president must approve any changes.
Enterprise Reporter Ron Miller outlines possible outcomes from the deal, while acknowledging we truly don't know what could happen next. He writes:
In the worst case, Musk could make Twitter his own personal social playground. In the best, he will work to improve some of the longstanding problems that have plagued the platform for years. In a statement on the deal Musk said that he wants to “make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”