Connect with us


Business and Brands

Twitter shares react as reports say Elon Musk deal close

Published

on

Twitter‘s shares rose by about 4% in opening trade in New York on speculation the firm could agree a takeover deal with Elon Musk as early as Monday.

The board of the social media giant is reported to have met with Mr Musk over the weekend to discuss his $43bn offer.

Advertisement

Twitter had initially rebuffed the billionaire’s approach.

But according to reports, Twitter is now in the final stages of negotiations with Mr Musk to buy the business.

Advertisement

Reuters, the news agency, reported that an announcement may come later on Monday after Twitter’s board met and recommended a deal to its shareholders.

Mr Musk’s targeting of Twitter has moved at remarkable speed. It emerged at the beginning of April that Mr Musk, who is the boss of electric carmaker Tesla, had become the largest shareholder in Twitter with a 9.2% stake.

Twitter responded by putting in place a so-called “poison pill” defence to fend off Mr Musk. The mechanism would have created difficulties for Mr Musk if he attempted to increase his stake in the company.

Apparent U-turn

The board now appears to have U-turned after Mr Musk revealed he had lined up a $46.5bn financing package for his offer – with funding from a mixture of his own assets and the backing of Wall Street banking giant Morgan Stanley and other firms.

Advertisement

Mr Musk recently said that he believes that Twitter should be more open and transparent. “I think it’s very important for there to be an inclusive arena for free speech,” he told the TED2022 conference in Vancouver.

He asked his 83.3 million followers on Twitter if the social media platform should allow people to edit their posts – 74% of those who responded wanted an edit button.

Mr Musk’s has also criticised Twitter’s process of verifying a Twitter account which he said was like “if Kafka had a Magic 8-Ball!”.

Advertisement

Even Twitter itself didn’t appear to take Elon Musk seriously when he first said that he wanted to buy it. It’s just Musk being, well, Musk, everyone thought. He may be the world’s richest man but he is also by his own admission cash-poor – and he is well-versed in posting unsubstantiated grand ideas on social media.

But underestimate him at your peril. He is a multi-billionaire and Twitter is one of his favourite toys – so he’s come back with a funded $43bn offer that the firm’s shareholders are now looking likely to accept.

Advertisement

Twitter hasn’t explicitly explained why it didn’t initially want to become part of Mr Musk’s empire. Certainly any social media firm with regulators breathing down their necks is going to be wary of a new owner who wants to “open up” the platform to more freedom of speech and less moderation.

He’s also keen on subscription rather than advertising as a business model, which may prove a hard sell for a platform that has not experienced significant user growth in ages.

Advertisement

A Musk-owned Twitter would have a very different feel, for sure. But he also brings to it his own brand of magic -criticise him on social media and you’ll soon bear the brunt of devoted fans who idolise him.

Twitter may decide to try to find an alternative buyer but Musk’s star quality would be difficult to substitute.

Advertisement
2px presentational grey line

He also recently tweeted: “If our Twitter bid succeeds, we will defeat the spam bots or die trying”…..And authenticate all real humans.”

Credit:BBC
Advertisement







Also Read...