Twitter King Elon Musk has finally acquired one of the largest social media platforms. He is ready to make gigantic changes for creators.
“Is the bird really freed? Or is it just trapped within an even bigger cage, now absolutely unaware?”
Let’s Start from the very beginning, shall we?
World’s Richest Person: Elon Musk finally bought one of the most famous social media platforms ‘Twitter’ for 44 Billion Dollars.
The very first thing Elon did after buying twitter was to terminate Parag Aggarwal (former CEO of Twitter) from his CEO position. He also terminated about 50 percent of its working employees.
Even in his own words, Elon seems the biggest Proposer of FREE SPEECH. According to him, his strongest agenda to buy Twitter was Freedom of Speech. He wants to bring a gargantuan revolution to freedom of speech by allowing anyone to freely write or speak about anything and everything regardless of someone’s ideology, or politically incorrect statement.
Reading all this you might be wondering if is he really helping the masses by not restricting their freedom of speech. Also, is this the real reason he bought Twitter in the first place?
Well, let me help you answer the former question in a brief. Indeed, some of it is true, however, the latter part of the question is what’s horrendous about this whole situation.
But what is it that makes the situation hilarious and dreadful at the same time?
Did you know that Twitter filed a case against Elon Musk and was forced to buy Twitter irrespective of his decision? Did you know Elon Musk had no other choice but to buy Twitter?
The backstory to buying Twitter is extremely fascinating and very thought-provoking…
In Today’s blog post let’s start with some facts that might help you navigate your way to chaos and make you a better thinker by giving you some thought exercises during the reading of this blog post.
Beginning of Twitter’s Backstory…
Our Story begins on 31st January 2022, when Elon Musk purchased shares on Twitter for the first time. Over the next couple of months, he steadily kept buying more shares and kept increasing his stake at Twitter. However, at his point in time, people didn’t know he had a stake in Twitter. This was a secret. By 14th March, his stakes had crossed 5%. According to America’s Securities and Exchange Commission (SEC), when an individual stake in a public company exceeds 5%, this needs to be disclosed to the SEC and the general public. Commission generally gives a deadline of 10 days but…
Elon Musk missed/neglected the deadline.
On 24th March, Elon Musk criticizes twitter on Twitter. He tweets to ask his followers about their opinion of the freedom of speech granted by twitter on Twitter. Whether the social media platform Twitter supports free speech and democracy or neglects it by constraining its users to not speak certain political ideologies.
At this point, Elon Musk was discussing his ideas with Twitter’s former CEO Jack Dorsey. Initially, Jack Dorsey seems very supportive as he liked Elon’s idea of purchasing Twitter. Jack was astonished by Elon’s passion for Free Speech. Even though back then at this point in time, Jack Dorsey wasn’t the CEO of Twitter and Parag Aggarwal had already become the new CEO.
On 3rd April, Elon Musk shared his ideas with the then-CEO Parag Aggarwal and discussed this with the rest of the board members. He asked them to either change Twitter to a Private Company or he’ll create a new ‘rival’ social media platform to compete against Twitter.
On the very next day, 4th April, the world learned that Elon Musk already had a significant stake in Twitter. He had purchased a whopping 9.2% stake in Twitter and had already become the largest shareholder in the company.
The rise Of Twitter’s Stock Price
After this announcement, the stock price of Twitter went up rapidly.
“Twitter shares: they are on a boom right now, up over a little 25% this is because Tesla CEO Elon Musk has taken a passive stake in Twitter, of 9.2% of Twitter’s common stock.”
Twitter 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 respectfully accepted the invitation from Parag Aggarwal.
“Is Twitter Dying?”
4 Days Later, on 9th April Elon Musk Tweeted, “Is Twitter dying?”
Concerned Parag Aggarwal messaged Elon Musk asking him about his tweet.
As the largest shareholder of Twitter, one who was offered a seat as the Board Member, he was still writing against Twitter.
Within an hour, Elon Musk replied that he would not join the board since it was a waste of time. “I’m not joining the board. This is a waste of time.” By 11th April, he clarified to Parag that he wanted to make Twitter a Private Company.
If you have come so far down, up until now, you might be wondering how the text messages between Elon Musk and Parag Aggarwal were revealed to the public. Were they leaked?
Actually, what had happened was, 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 14 April 2022, Elon Musk shocked everyone. He announced his offer to buy the whole company. He offers 43 Billion Dollars to buy the company. Why though?
Experts argue that Elon Musk is attached to Twitter. And Twitter is close to Elon Musk’s Heart and Soul. (metaphorically obviously)
But that as a Board Member or a shareholder, participating in discussions and wasting time, didn’t interest him. He wanted to take 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. However, these rules did not apply to private companies.
If Private Companies want, they can hide a lot of things from the public. One thing you might be wondering, is that when a public company becomes a private what happens to the public shareholders?
In such cases, the entity buying the company has to pay the shareholders.
The 43 Billion Dollars 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 pleased and supported the notion of Musk purchasing the company.
But the Texts between the then CEO Parag Agarwal and Elon Musk didn’t end on a happy note. Elon Musk felt frustrated with Parag Agarwal as he was moving slowly with the offer but Musk wanted fast results. Tensions between Elon and Parag kept on growing. Musk wrote to Twitter’s Chief of Board… Taylor.
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 Morgen Stanley, and 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, which would be exchanged for tesla stock, and $7.1 Billion would be in form of equity from 19 independent investors.
Twitter 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 Dollars.
In spite of 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.
- 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 Aggarwal would get $39 million, whereas Jack Dorsey would get $978 million.
This might sound like a happy ending, but Elon Musk’s offer was accepted. Elon would get Twitter and other Twitter stakeholders would be happy too.
But on 13th May, Elon Musk suffered from Buyer’s remorse.
The feeling of guilt or regret you get when you go to buy a new smartphone, and after the purchase, you feel like you even need it? Did you just waste your money? Perhaps you shouldn’t have bought this. This causes you much discomfort. Perhaps Elon Musk was suffering from the same.
He put this deal on hold. And what was the reason he gave for this?
Elon Musk said that there were some reports that claimed only 5% of Twitter users were actually bots. When he apparently believed this to be as high as 20%. He claimed 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 their 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 Aggarwal 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 however funny or weird it may sound 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 and that he will not say anything negative about the company or its employees as long as the negotiations of the deal were underway. On the contrary, he kept defaming the company’s CEO Parag Aggarwal.
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 they weren’t capable enough to reveal the precise data because if an outsider 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, affected the performance of the company. That their revenue was decreasing.
Fellas, at this point in time, with the $1 Billion fee, that Elon Musk had to pay for backing out of the deal, Twitter wanted not only that, but 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 details. That twitter misled its investors by floating a false number of spam and bot accounts.
23rd August 2022, a new chess piece entered the chess board, and Elon Musk found a new excuse.
New Player Added to the game of Twitter.
Peiter “Mudge” Zatko’s whistleblower report was revealed to the world.
“Accusing that Twitter falsely claimed it had 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 he 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 has 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 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
Elon Musk saw an opportunity and sent the second termination letter to Twitter. He said that the first termination letter was 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, not because of any of the reasons mentioned above but because he was too concerned about World War III.
Elon’s Concerns bout’ world war iii
He was worried and had an uneasy feeling that World War III might erupt. The Senate Judiciary Committee of America agreed to listen to Zatko’s allegations on September 13th. 4 days prior to this event, 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 unfavorable changes in Twitter in terms of its business, financial condition, or valuation. So they didn’t have any concrete reason to reject the deal.
Elon Had No other choice but to buy Twitter at this point
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 their worries. The Washington Post reported that 75% of employees working at Twitter might be fired by Elon Musk. But these employees claimed that regardless of Elon Musk’s intention to fire employees, the Board Members were already prepared to fire 25% of the employees by the end of 2023, nonetheless.
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.
Elon ‘Finally’ bought Twitter
But on 27th October 2022, this deal was finally closed. Elon Musk officially bought Twitter. And tweeted “the bird is freed.”
“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 his firing CEO Parag Aggarwal broke out instantly. Additionally, the CFO, Chief Legal Officer, and General Council were also fired. Security came and escorted them out.
Elon’s Plan for the future of Twitter
Elon Musk became the new CEO of Twitter. And put his plans for Twitter in front of the public. They were genuinely 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 with each other, play video games, and even make payments.
One app for it all. The ‘X’ App.
The second plan that he revealed was the blue tick marks that you see on Twitter, which 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.
Paying for the blue tick
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 2022, 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. As I told you at the beginning of this blog post, Elon Musk 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. To which Elon Musk replied, “time for Trump to hang up his hat and sail into the sunset.”
- We will have to wait and see what the future of Twitter beholds for us.
And How firmly would Elon Musk stick to his grounds?
One news that’s being reported for sure, is 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’s takeover, 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 by tweeting 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 at the current moment in time. To enable an expansion of this scale, he may try to shape Twitter like TikTok.
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.
Being said that, Twitter users are at an all-time high.
After getting to know all of this, What do you think about it?
Will Elon Musk’s outlandish ideas make Twitter better?
Or will it worsen?