Elon Musk has always been a proponent of free speech, as shown by the criticism he levied on Twitter in the lead-up to his purchase of the company. AFP
Elon Musk has always been a proponent of free speech, as shown by the criticism he levied on Twitter in the lead-up to his purchase of the company. AFP
Elon Musk has always been a proponent of free speech, as shown by the criticism he levied on Twitter in the lead-up to his purchase of the company. AFP
Elon Musk has always been a proponent of free speech, as shown by the criticism he levied on Twitter in the lead-up to his purchase of the company. AFP

Why did Elon Musk buy Twitter and what happens next?


Alvin R Cabral
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Elon Musk finally did it. Twitter, the social media titan whose board Mr Musk refused to join, is now his, making the world's wealthiest person and technology mogul an even bigger force to reckon with.

After some internal discussions, Twitter's board on Monday announced that it unanimously agreed to sell the platform in its entirety to the chief executive of Tesla Motors, in a deal valued at $44 billion.

Shareholders will receive $54.20 per share, a 38 per cent premium over the company's closing stock price on April 1. The deal is expected to be finalised by the end of this year.

Of course, the prolific Twitter user announced the news and celebrated it with his 84.5 million followers on the microblogging site.

The agreement was also hailed by Twitter co-founder Jack Dorsey, who gave a ringing endorsement by saying Mr Musk was the "singular solution he trusts".

When did it all start?

On April 4, Mr Musk revealed he had acquired 9.1 per cent of Twitter stock — making him the biggest shareholder at that point. However, the Vanguard Group, the biggest shareholder before his purchase, subsequently surpassed him. He was offered a seat on the company's board but ultimately rejected it.

Long before his disclosure, Mr Musk had quietly started on January 31 to build up his stake in the company. It is unclear if the Tesla founder already had intentions to fully acquire Twitter at the time.

Mr Musk then on April 14 made his surprise offer to buy 100 per cent of Twitter for about $43bn. The company then countered with a "poison pill" shield, adopting a limited-duration shareholder rights plan, which would enable its shareholders to buy additional stock.

What is Elon Musk's plan for Twitter?

Mr Musk has always been a proponent of free speech, as shown by the criticism he levied on Twitter in the lead up to his purchase of the company. Free speech is on top of his agenda once he finally takes full control of the transaction, which is expected to be finalised in 2022.

Mr Musk has pledged that he will transform Twitter by loosening rules on what content can be posted, eliminate advertisements, reduce spam, open the platform's algorithm and add an edit button, which is being tested by Twitter.

Not everyone, however, seems to be convinced. Former US president Donald Trump ― arguably the world leader who posted the most on Twitter, before his account was permanently banned on January 6, after the deadly siege on the US Capitol ― has said he has no plans to rejoin Twitter after the deal with Mr Musk was announced.

“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," Mr Trump was quoted as telling Fox News on Monday, referring to his own social media platform, Truth Social.

What is Elon Musk's net worth?

Mr Musk has been ranked the world's wealthiest person since January 2021 and had an estimated net worth of about $257bn as of Tuesday. The majority of his wealth comes from Tesla, in which he owns a 21 per cent stake.

Aside from being at the helm of electric vehicle major Tesla, aerospace company SpaceX and infrastructure entity The Boring Company, Mr Musk is also the co-founder of neurotechnology venture Neuralink and artificial intelligence company OpenAI.

He also played a key role in founding the payments company PayPal.

Mr Dorsey, meanwhile, has a net worth of about $7bn. The sale of Twitter will net him a relatively modest sum of about $975 million, based on the 18 million shares or 2 per cent he owns in the company.

Jack Dorsey, the co-founder of Twitter, says Elon Musk is the 'singular solution he trusts' to solve the social media platform's issues. AFP
Jack Dorsey, the co-founder of Twitter, says Elon Musk is the 'singular solution he trusts' to solve the social media platform's issues. AFP

What happens next?

Corporate takeovers are complicated, especially those of Twitter's magnitude.

In terms of financing, Mr Musk was able to secure $46.5bn to take Twitter private, enough to sway the company's board to engage him on the negotiating table. Twitter, however, said that Mr Musk is “providing an approximately $21bn equity commitment".

What we don't know is where the rest of the money would come from. Private equity firms – which typically avoid hostile takeovers – may come on board, now that the deal has turned friendly. Some existing shareholders could also roll their stakes into the new private company.

"All of that means that Musk might not be on the hook for much of the money himself, which could be a relief to shareholders of Tesla, who’ve been worried he’d sell his stake in the electric car maker to fund Twitter," Bloomberg reported.

Who will own and run Twitter?

Twitter chairman Bret Taylor and chief executive Parag Agrawal are still part of the company. But that could quickly change.

It's obvious that Mr Musk would well be in the running to take a top role in Twitter's eventual new leadership, but given that he is already chief executive of both Tesla and SpaceX, in addition to his other endeavours, chances of him becoming chief executive may be limited.

Elon’s goal of creating a platform that is 'maximally trusted and broadly inclusive' is the right one
Jack Dorsey,
co-founder of Twitter

His plans are unclear for now, but if Mr Musk is not chief executive, he would definitely want someone he knows and trusts – and, more importantly, who shares his reform vision on Twitter – to run the company. If he does not hand-pick one, a thorough search will be conducted. Mr Musk has in the past expressed dissatisfaction about Twitter's leadership.

In terms of ownership, Twitter said it was selling itself to an entity "wholly owned" by Mr Musk. So far, no co-investors have been named, and anyone who may join in that capacity will be limited to being minority shareholders.

One thing to note about private companies is that, unlike public or listed companies, they are not required to disclose their financial reports, which means there is less or no shareholder pressure to show profit and revenue for. Twitter will be reporting its fiscal first-quarter results on Thursday.

Elon Musk keeps stirring the pot

Not one to rest on his laurels – and probably rubbing the victory in the faces of his naysayers – Mr Musk continues to hype his successful bid with some inclusive and even odd statements.

He said he hopes that even his "worst critics" will remain on Twitter, even though he now has full ownership of it.

And before that, he even floated the idea of turning Twitter's San Francisco headquarters into a homeless shelter, which was deemed a "great idea" by Amazon founder and fellow top billionaire Jeff Bezos.

Elon Musk's career - in pictures

Tearful appearance

Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday. 

Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow. 

She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.

A spokesman said her upset demeanour was due to a personal matter.

Profile of Hala Insurance

Date Started: September 2018

Founders: Walid and Karim Dib

Based: Abu Dhabi

Employees: Nine

Amount raised: $1.2 million

Funders: Oman Technology Fund, AB Accelerator, 500 Startups, private backers

 

What is Reform?

Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.

It was founded in 2018 and originally called the Brexit Party.

Many of its members previously belonged to UKIP or the mainstream Conservatives.

After Brexit took place, the party focused on the reformation of British democracy.

Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.

The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.

The alternatives

• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.

• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.

• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.

2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.

• PayPal is probably the best-known online goods payment method - usually used for eBay purchases -  but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.

Specs

Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request

8 UAE companies helping families reduce their carbon footprint

Greenheart Organic Farms 

This Dubai company was one of the country’s first organic farms, set up in 2012, and it now delivers a wide array of fruits and vegetables grown regionally or in the UAE, as well as other grocery items, to both Dubai and Abu Dhabi doorsteps.

www.greenheartuae.com

Modibodi  

Founded in Australia, Modibodi is now in the UAE with waste-free, reusable underwear that eliminates the litter created by a woman’s monthly cycle, which adds up to approximately 136kgs of sanitary waste over a lifetime.

www.modibodi.ae

The Good Karma Co

From brushes made of plant fibres to eco-friendly storage solutions, this company has planet-friendly alternatives to almost everything we need, including tin foil and toothbrushes. 

www.instagram.com/thegoodkarmaco

Re:told

One Dubai boutique, Re:told, is taking second-hand garments and selling them on at a fraction of the price, helping to cut back on the hundreds of thousands of tonnes of clothes thrown into landfills each year.

www.shopretold.com

Lush

Lush provides products such as shampoo and conditioner as package-free bars with reusable tins to store. 

www.mena.lush.com

Bubble Bro 

Offering filtered, still and sparkling water on tap, Bubble Bro is attempting to ensure we don’t produce plastic or glass waste. Founded in 2017 by Adel Abu-Aysha, the company is on track to exceeding its target of saving one million bottles by the end of the year.

www.bubble-bro.com

Coethical 

This company offers refillable, eco-friendly home cleaning and hygiene products that are all biodegradable, free of chemicals and certifiably not tested on animals.

www.instagram.com/coethical

Eggs & Soldiers

This bricks-and-mortar shop and e-store, founded by a Dubai mum-of-four, is the place to go for all manner of family products – from reusable cloth diapers to organic skincare and sustainable toys.

www.eggsnsoldiers.com

ESSENTIALS

The flights

Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.

The hotels

Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.

The tours

A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages. 

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Updated: April 26, 2022, 10:48 AM`