This is how the takeover proceeds

Musk fought tooth and nail for many months against the acquisition, the number of users of Twitter would not be correct. The short message service insisted on the contract and complained that the corresponding process would have started soon.

The back and forth raises a number of questions. Why did Musk change his mind? And how does he intend to finance the takeover? How is the purchase going and how does he want to run the company?

Elon Musk pulls the emergency brake at the last moment. In just a few days, the process of the deal that had initially collapsed would have begun. Musk should have testified under oath on Friday.

The court process would have cost a lot of time and money and led to a mud fight. In the United States lawyers for both parties can achieve a lot with so-called subpoenas. Even without a judge’s decision, the respective parties must provide letters, e-mails and all other messages on the subject of the complaint. A circumstance, for example Volkswagen caused some headaches in the course of the lawsuit about the diesel scandal in California.

Musk got a taste of it last Thursday when court filings containing private text messages from Musk leaked to the public. You could read about pandering, offers and flattery from friends, acquaintances and business partners. A total of almost 500 people and Twitter-Users are listed on the file, including Larry Ellison, founder of Oraclemedia czar Rupert Murdoch or Mathias Döpfner, head of Axel jumper.


Ultimately, it was clear that Musk had a bad hand in the process. A warning sign: Judge Kathaleen McCormick hit Twitter several times during the preparations. Musk had late April concluded a purchase agreement with Twitter, but then backed down. Allegedly there are many more fake accounts, so-called bots, than Twitter had previously admitted.

However, Musk had previously waived a due diligence check, i.e. a thorough examination of the books. With that he could have clarified the question with the bots. This fact weighs heavily in court. “Musk is finally listening to his lawyers,” said Anat Alon Beck, an incoming law professor at Case Western Reserve University.

How is Elon Musk financing the Twitter takeover?

There are winners and losers in the latest turnaround. Hedge fund managers like Carl Icahn had bought into Twitter when Elon Musk called off the takeover and the share price plummeted. They knew about the multi-billionaire’s poor chances in the process and bet that he would have to fulfill the contract. Icahn alone reaped profits of 250 million dollars from the price increase in the past few days.

The losers of the back and forth are banks, above all MorganStanley. A consortium led by the investment bank is giving Musk $12.5 billion for the deal. According to the unanimous opinion of experts, they cannot get out of the obligation. “They have no choice,” says Dan Ives, analyst at Wedbush.

Delaying the deal is costing the banks a lot of money, according to financial experts, in the hundreds of millions of dollars. Interest rates have risen sharply since April, driving down yields on the so-called “leveraged loans” banks give Musk. Pass MorganStanley, Bank of America or Barclays the loans to investors continue, they now receive less money. “Banks are hooked on Twitter,” Chris Pultz, portfolio manager at Kellner Capital, told Reuters.

Musk himself can look forward to the question of financing with equanimity. He sold large quantities on several occasions Teslashares, most recently in August almost eight million shares worth almost seven billion dollars. In total, Musk raised $32 billion. He still owns 15 percent of Tesla.

Large investors who contribute more than seven billion dollars are important for Musk and his advisors. These include the Qatar pension fund and the Binance crypto exchange. Musk also pulled off a coup: the Saudi Arabian Prince Walid bin Talal initially wanted to sell his Twitter shares worth almost $1.9 billion. But now he wants to stick with it, Musk’s charm offensive worked. “An excellent boss” is Musk for Twitter and a “new friend,” said the prince, who has been known as an investor for many decades.

What does Tesla boss Elon Musk want to change on Twitter?

Looks like Musk will run Twitter himself. The billionaire has not suffered well under many employees. “Twitter’s leadership is an additional distraction for Musk,” said Mark Spiegel, money manager at Stanphyl Capital. He thus refers to the high workload of the 51-year-old, who, in addition to Twitter, also TeslaSpaceX and other companies conduct or promote.

>> Read also: Elon Musk delights the Kremlin with his “peace plan”.

One of the first actions will be: ban the bots. When Musk spoke to Twitter’s board of directors in April, he announced “drastic” action, according to court documents. “It’s difficult to do as a listed company, the deleted fake accounts make the user numbers look terrible,” said Elon Musk accordingly. That is why the restructuring had to take place as a privately run company. Later, Musk wants to list the company again as a public company.

The richest person in the world also wants to make the short message platform less dependent on advertising revenue. In 2021, these accounted for 90 percent of sales. Musk sees this as too much influence by advertisers on the content. He relies on subscription models, at least for state and commercial accounts.

In order to attract users, Twitter should become like Wechat, Musk said in June during a question and answer session with Twitter employees. we chat is a platform in China where not only messages can be exchanged, but also where you can pay or shop. “People live with Wechat in China,” said Musk, “if we can imitate that, Twitter will be a great success.” of the government in Beijing, he leaves it out.

Musk also sees another Chinese app as a role model: With the help of new algorithms, similar to those of the video platform Tiktok, Twitter should better uncover “imminent news”: “We could make Twitter similarly interesting.”

More: Musk now wants to buy Twitter at the original offer price – the share increases by 22 percent

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