President Trump Issues Executive Order Against Social Media Companies (Photo by Doug … [+]
Yesterday’s announcement that the Twitter
After his initial bid didn’t receive a response from the Board and in fact they adopted a poison pill making it cost prohibitive to buy more than 14.9%, he went back to the Board with the deal fully financing, making his offer more serious.
On 4/24 Musk delivered a letter to the Chairman of the Board of Twitter reiterating his interest in buying the company at $54.20/share. In the letter, he again inferred that if the Board did not accept the offer, he would dump his shares on the open market.
“As we discussed, $54.20 has been and will remain my best and final offer, period. This is binary—my offer will either be accepted or I will exit my position,” wrote Musk. He also offered an alternative whereby the transaction would simply go to a shareholder vote. “I have attached a merger agreement that is “seller friendly” and that does not require you to recommend in favor of my offer. This will provide all shareholders a voice, and allow for a democratic decision consistent with Twitter’s ethos,” he said.
This came just one day before Twitter agreed to the transaction at the offer price, but it was successful in getting some other concessions. Musk wrote, “in order to provide further value and choice to shareholders (within the legal boundaries of a private, unlisted company), we are willing to explore options that allow existing shareholders (including convertible securities and other related instruments) to invest all or a portion of their proceeds into the proposed transaction. Any such rollover transaction would be structured as a separate negotiated transaction consistent with laws and regulations and not be a public offer, and would not affect the proposed $54.20 cash offer transaction.”
In addition, Twitter CEO Parag Agrawal said that Elon Musk agreed to convert employee stock option holders to cash once the deal closes and pay them out on the existing vesting schedule.
After his initial bid didn’t receive a response from the Board and in fact they adopted a poison pill making it cost prohibitive to buy more than 14.9%, he went back to the Board with the deal fully financing, making his offer more serious.
On 4/24 Musk delivered a letter to the Chairman of the Board of Twitter reiterating his interest in buying the company at $54.20/share. In the letter, he again inferred that if the Board did not accept the offer, he would dump his shares on the open market.
“As we discussed, $54.20 has been and will remain my best and final offer, period. This is binary—my offer will either be accepted or I will exit my position,” wrote Musk. He also offered an alternative whereby the transaction would simply go to a shareholder vote. “I have attached a merger agreement that is “seller friendly” and that does not require you to recommend in favor of my offer. This will provide all shareholders a voice, and allow for a democratic decision consistent with Twitter’s ethos,” he said.
This came just one day before Twitter agreed to the transaction at the offer price, but it was successful in getting some other concessions. Musk wrote, “in order to provide further value and choice to shareholders (within the legal boundaries of a private, unlisted company), we are willing to explore options that allow existing shareholders (including convertible securities and other related instruments) to invest all or a portion of their proceeds into the proposed transaction. Any such rollover transaction would be structured as a separate negotiated transaction consistent with laws and regulations and not be a public offer, and would not affect the proposed $54.20 cash offer transaction.”
In addition, Twitter CEO Parag Agrawal said that Elon Musk agreed to convert employee stock option holders to cash once the deal closes and pay them out on the existing vesting schedule.
On Monday, Musk tweeted, “I hope that even my worst critics remain on Twitter, because that’s what free speech means.” It’s believed that once the transaction closes, Musk will allow those who have banned from the platform to reactive their accounts.
This includes former President Donald Trump, who was “permanently suspended” from Twitter, as well as being shut down on Facebook, Instagram and Snapchat after the Capitol riot on Jan. 6, 2021. However, after complaining bitterly about the bans in the past, he stubbornly is now taking the position that he won’t come back to Twitter even if asked to do so, preferring to post on his own social media platform Truth Social (which, as his critics have pointed out, he has still yet to do).
Trump told Fox News just before the deal was announced, “I am not going on Twitter, I am going to stay on Truth. I hope Elon buys Twitter because he’ll make improvements to it and he is a good man, but I am going to be staying on Truth.” He also stated that Twitter “became very boring because conservatives were thrown off or got off the platform when I left.”
Besides opening up the social media platform to all voices, Musk is expected to come up with some sort of a subscription model, which would likely charge celebrities, companies, influencers, politicians and other parties who use Twitter to promote their products or agenda. They currently offer only one subscription model called Twitter Blue which was rolled out last year. It offers premium features like the ability to undo tweets for $2.99 per month.
This relatively new revenue stream could provide the company with a path to significant profitability. Despite having an estimated 416 million weekly viewers (according to data.ai as of April 16), the company is significantly behind revenue wise from other major social media platforms like Meta’s Facebook.
“Twitter is a struggling company,” Sara Silver, a business journalism professor at Quinnipiac University, said in a statement. “It lost money the last two years and was only profitable in two of the last five. This contrasts sharply with Facebook owner Meta, Alphabet’s Google
After popping $3.25 (+6.8%) to $51.02 4/25, TWTR sank with the rest of the market on 4/26 (down $2.02, -3.9% to $49.68 versus a 2.8% decline in the S&P 500 and a 4.0% decline in the NASDAQ
Much worse damage was done at Tesla
Elon Musk’s official Twitter profile (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket … [+]
Source: https://www.forbes.com/sites/derekbaine/2022/04/26/former-president-donald-trump-says-he-wont-come-back-to-twitter–pushing-truth-social/