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Elon Musk

26.04.2022 Featured TIMELINE: How Elon Musk’s ‘Love’ for Twitter Led to His Takeover

Published 26th Apr, 2022

By Emmanuel Uti

Elon Musk, the world’s richest man, reached an agreement to acquire Twitter Inc. for $44 billion in cash on Monday. This deal means the micro-blogging platform is now in the business mogul’s total control, going forward.

Before Musk acquired the 16-year-old platform, he constantly attacked Twitter’s censorship policy openly. The self-proclaimed free speech absolutist continuously advocated for the prioritisation of all tweets made by users. He also objected to giving too much power on the service to corporations that advertise.

Prior to his eventual acquisition of the ‘Bird App’ on Monday evening, many significant events had unfolded in the past.

On December 21, 2017, Musk declared he loved Twitter in a tweet. He went further to ask for the amount it would cost him to acquire it.

READ ALSO: Is the ‘Edit’ Button Finally Here? —What Elon Musk’s Twitter Acquisition Means for Users

MUSK BEGAN ACCUMULATING HIS STAKE ON JANUARY 31.

Musk started purchasing Twitter stock on January 31 quietly. By March 14, the world’s richest man had amassed a holding of more than 5 percent, the threshold at which he was required to report the activity to the Securities and Exchange Commission and to the public.

Musk was 10 days late in notifying the SEC. Due to the fact that Twitter’s stock price increased the moment his investment was disclosed, he was able to purchase more shares on the cheap by not declaring – a blunder that would later result in a shareholder lawsuit.

MUSK BEGAN CRITICISING TWITTER ON MARCH 24.

Musk started tweeting complaints about the firm in late March, while his investment remained unknown.

“Worried about de facto bias in the Twitter algorithm having a major effect on public; Twitter algorithm should be open source,” he tweeted.

“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” Musk again polled his Twitter followers on March 25.

“Is it necessary to create a new platform?” Musk asked in a March 26 tweet. “I am really considering this.”

READ ALSO: New Twitter CEO Lands in ‘Free Speech’ Controversy

Several individuals who commented on the Tesla Inc. CEO’s post suggested he considered purchasing Twitter instead. Unknown to them, Musk was already amassing shares.

APRIL 4: MUSK’S OWNERSHIP IN TWITTER BECOMES PUBLIC

On April 4, Twitter users woke up to seeing ‘Elon’ and ‘Elon Musk’ on the trend table. It turned out, Musk had just bought a significant stake in Twitter Inc.

Although the business man’s portfolio identified him as a passive investor, he began tweeting about business proposals for the social media start-up.

He later launched another poll on Twitter, asking users whether they wanted the firm to include an edit button that would enable users edit tweets after they were published.

Parag Agrawal, a Twitter’s executive, advised users to ‘vote carefully’ in the poll.

“The consequences of this poll will be important,” Agrawal said in a tweet.

On the same day, Twitter asked Musk to join its board of directors. In an initial response, Musk said he would enter into an arrangement limiting his ownership to 14.9 per cent of the company’s stock.

READ ALSO: Jack Dorsey Steps Down After Six Years as Twitter’s CEO

MUSK BECOMES AN ACTIVE INVESTOR ON APRIL 5

On April 5, several members of Twitter’s board of directors took to the platform to congratulate Musk on his choice to officially join the board. Agrawal later revealed that the business has been in contact with Musk for weeks. People questioned why Agrawal, who was in negotiations to become a director, would register as a passive investor.

Later that day, Musk amended his status in the company and became an active investor. This was after declaring his willingness to accept a position on the social media company’s board of directors.

MUSK DECLINES THE BOARD POSITION ON APRIL 9

Musk told Twitter on the day he was scheduled to join the company’s board of directors that he would be declining the offer.

However, Twitter withheld the news from its users for almost 36 hours, awaiting Musk’s final decision. This is according to the Times of India.

Musk was eventually named a board member on Twitter’s investor relations website over the weekend.

While the public believed Musk was still poised to join Twitter’s board of directors at the time, Musk posted many veiled comments and recommendations for the firm.

In one of his comments, he asked his followers, “Is Twitter dying?”

READ ALSO: Five Things Learnt From FG’s Statement Lifting Twitter Ban

Musk further proposed that anybody who signed up for Twitter Blue, the company’s premium membership service for advanced users, should get an authenticating checkmark.

He also recommended that Twitter’s San Francisco headquarters be converted into a homeless shelter ‘since no one shows up anyway’. Additionally, he made several crude remarks, suggesting that the “w” be removed from Twitter.

TWITTER MAKES THE NEWS PUBLIC ON APRIL 10

Agrawal would later deliver a memo to staff on Sunday that Musk would not be joining the Twitter board. On the same day, he made the news public through a tweet. Neither Agrawal nor Musk provided an explanation for the U-turn.

APRIL 11: MUSK CLEARS HIMSELF WITH SEC

On April 11, Musk submitted a revised disclosure statement to the Securities and Exchange Commission. This meant he was now free to acquire as many shares as he desired.

It also meant he was no longer obligated to operate in the best interests of Twitter shareholders without a board position.

APRIL 14: MUSK MAKES AN ALL-CASH BID TO ACQUIRE TWITTER

In an SEC filing and accompanying tweet, Musk stated that he would buy out Twitter stockholders for $43 billion in cash and make the platform private.

His bid price of $54.20 a share represented a 54 per cent premium over the price at which he began amassing his holdings in January.

Morgan Stanley, a US-based investment bank and financial services company was then invited to advise Musk on his ‘best and final’ proposal.

READ ALSO: ‘Election Campaign Has Kicked Off’ — Reactions as FG Lifts Twitter Ban

TWITTER ADOPTS A ‘POISON PILL’ TO STAVE OFF A MUSK TAKEOVER ON APRIL 15

To counter Musk’s take over bid, Twitter implemented ‘poison pill,’ a rights plan that permitted shareholders to acquire shares at a discount if any shareholder owned more than 15% of the company. This was done essentially to dilute the billionaire’s share in the company.

The company said in a statement that the intention of the plan was to ensure that anyone taking control through open-market accumulation paid all shareholders an appropriate premium.

During the period, Twitter had been fielding interest from other parties, including Thomas Bravo, a private equity firm.

TWITTER’S BOARD OF DIRECTORS HOLDS NEARLY NO SHARES ON APRIL 16

On April 16, Musk said in a series of tweets on the proposed purchase that:

“With Jack departing, the Twitter board collectively owns almost no shares.”

The tweet indicated that the board’s economic interests were not aligned with those of the shareholders.

READ ALSO: From NCDC to NFF, How Twitter Ban Hampered the Work of Gov’t Institutions

MUSK RETAINS MORGAN STANLEY TO EXPLORE A LEVERAGED TAKEOVER ON APRIL 19.

On April 19, the New York Post said that Musk was willing to invest up to $15 billion of his own money and borrow against his Twitter investment in order to speed up a deal.

MUSK SECURES $46.5 BILLION IN INVESTMENT ON APRIL 21.

On April 21, Musk announced his intention to make a tender bid for Twitter, claiming to have obtained $46.5 million in financing.

According to a statement with the Securities and Exchange Commission, Musk had secured $25.5 billion in debt financing from Morgan Stanley and other financial institutions, including margin loans secured by his Tesla shares, and $21 billion in equity financing from himself.

READ ALSO: BREAKING: FG Lifts Twitter Ban

APRIL 24: THE BOARD OF DIRECTORS MEETS WITH MUSK

The board of directors of Twitter and Musk met on Sunday in an extraordinary meeting. The lengthy meeting continued into the next day. After Musk disclosed the specifics of his finances, the board started to consider Musk’s offer more seriously.

MUSK ACQUIRES TWITTER ON APRIL 25.

Twitter eventually agreed to sell to Musk for $54.20 per share, which was Musk’s first offer. The purchase, which was estimated to be worth around $44 billion, would privatise the corporation.

Musk has stated that he would prioritise free speech on the site, open-source its algorithms, eliminate spam, and introduce new features. Twitter said that it anticipated a transaction conclusion in 2022.

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Published 26th Apr, 2022

By Emmanuel Uti

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