September 27, 2022

Elon Musk explains why he wants to buy Twitter

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The offer to acquire Twitter is driven by the intent to create “an inclusive arena for free speech” rather than a desire to make money. This was stated by Elon Musk at the TED conference.
On April 13, the billionaire sent a statement to the SEC, according to which he is ready to buy a social network at a price of $54.2 per share – almost $43 billion, given the number of company securities. Twitter quotes responded with an 11% increase to the offer of the founder of Tesla.

The next day, Saudi Prince Alwaleed bin Talal Al Saud rejected Musk’s offer. Through the holding company Kingdom Holding Company, he controls about 5% of the shares of the platform.

In response to Prince’s words, Musk asked how much of Twitter directly and indirectly owns Kingdom Holding Company, as well as how the company views “journalistic freedom of speech.”

At the TED conference, Musk noted that he has a “plan B” in case Twitter shareholders reject the offer. The billionaire did not disclose details.

According to the head of Tesla, he is not going to “monopolize” the social platform, but he has enough capital to acquire it.

Musk stressed that Twitter should use open source algorithms to rule out any “behind the scenes manipulation.” He believes that users should be allowed to edit posts, as well as actively combating fraud and spam on the platform.

The community was divided on Musk’s proposal. Some believe that the billionaire will really be able to do a lot of good for Twitter, while others call the initiative a “hostile takeover.” In particular, this position was made by the founder of Dogecoin (DOGE) Jackson Palmer.

According to The Information, Twitter’s board of directors also does not share Musk’s optimism and intends to fight the takeover. Managers deemed the proposal “undesirable,” according to the publication.

In the financial environment, the attitude towards the billionaire’s initiative is also ambiguous. According to CNBC, investment bank Stifel downgraded Twitter’s stock, explaining that the company is heading “toward the Elon circus.”

Twitter shares closed the session on April 14 at $45.08. In premarket trading, the price of the securities rose – at the time of writing, they are trading near $46.79.

In April 2022, Musk became the largest shareholder of Twitter, having bought 9.2% of the company’s securities for $2.89 billion. Previously, the billionaire criticized the social network’s freedom of speech policy.

Recall that the head of Tesla proposed to reduce the cost of a Twitter Blue subscription and provide users with the opportunity to pay for a premium service in DOGE.

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