By now most people know that Elon Musk, the world’s richest man, purchased 9.2% of Twitter’s outstanding shares worth around $2.9 billion in early April. This made Musk the largest single shareholder of Twitter.
The purchase was a bit of a surprise since Musk had raised questions about the site’s free speech policy.
Free speech is essential to a functioning democracy.
Do you believe Twitter rigorously adheres to this principle?
— Elon Musk (@elonmusk) March 25, 2022
Musk is known to be a staunch promoter of fundamental rights including free speech. And he does not walk away from this when faced with strong opposition. An example was when he refused to block Russian media houses on his Starlink satellite system citing freedom of expression. Musk said that won’t happen “unless at gunpoint”.
Musk’s purchase led to Twitter offering him a seat on its Board of Directors. Twitter announced his appointment.
He’s both a passionate believer and intense critic of the service which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term. Welcome Elon!
— Parag Agrawal (@paraga) April 5, 2022
What was the real reason? Twitter was trying to limit Musk’s ability to push his agendas. A key rule is that “so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Company’s common stock outstanding at such time.”
Musk wisely declined.
Then Musk filed paperwork with the SEC to take Twitter private for 20% over the current market valuation (approx. $41 billion).
Musk stated his intentions:
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy. However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.
As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder. Twitter has extraordinary potential. I will unlock it. (SEC LINK)
Twitter acted to prevent the takeover by using a poison pill approach. This would involve issuing shares at half price if any investor would gain ownership of more than 15% of the outstanding shares.
At this point it would appear that the push to take Twitter private is over. However, was that ever a possible reality? What was Musk’s real purpose in all of this?
To some this may have seemed to be a rich guy with too much time on his hands. Musk was fooling around in the stock market because he could (Musk is worth some $260 billion). Eccentric he is known to be. He is also a visionary and a genius. As Andrea Widburg notes:
Musk speaks his mind. He outraged the woke mob when he supported hydroxychloroquine treatments for COVID (almost certainly helpful), stated that children are not vulnerable to COVID (true), was suspicious of government COVID death statistics (which the CDC has since revised), and criticized lockdowns (which the government concedes made no difference). He’s also criticized the push in Western countries to lower the birth rate below replacement level; attacked public transportation; and, most recently, when Biden’s policies drove up fuel prices, called for more drilling.
Did Musk stumble onto something in how Twitter operates that has caused him to engage the way he has?
Some people with expertise in these kinds of web technology have a potential insight on all of this. And that understanding could fundamentally alter the course of history in this country and around the world.
More on this tomorrow.
If a super rich guy can help us address the need for transparency and confront the corruption of politics, medicine and economics, more POWER to him!!!!