Here’s What You Need to Know About Elon Musk’s Pause of 44B Twitter Deal

To learn more about how many Twitter accounts are bogus or spam, Elon Musk, the tech billionaire, said he was putting a 44 billion offer to acquire the social media site “temporarily on pause” on Friday.

In May, Reuters published an article citing a securities filing that said that fewer than 5% of Twitter’s 229 million daily users who viewed adverts in the first quarter of this year were false accounts.

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users

— Elon Musk (@elonmusk) May 13, 2022

Musk tweeted, “Still committed to acquisition.” On Friday, Twitter’s share price fell 8% to 41.16 per share.

Bernstein senior research analyst Toni Sacconaghi told CNBC that the postponement may be a “negotiating strategy” to persuade Twitter to decrease its selling price since the company’s stock has been sliding.

Earlier this month, Twitter announced that Elon Musk had agreed to acquire the firm for 54.20 per share in cash, as reported by the company. When the entrepreneur, who heads Tesla, SpaceX, and other firms, declared he owned more than 9 percent of Twitter on April 1, the transaction represented a 38 percent premium to the closing stock price. Taking Twitter private would mark the end of Twitter’s time as a publicly listed corporation.

Tech billionaire and Twitter have had an ups and downs relationship since their merger in 2013. As one of Twitter’s top owners, Musk passed down the opportunity to serve on the board of directors and instead opted to acquire the business outright. Musk was able to collect over 46 billion in cash and stock to pay for the purchase, which convinced the board. The acquisition is still awaiting shareholder approval and is not likely to finalise for another six months.

Since then, Musk has been keeping himself occupied with a variety of projects. He sold 8.5 billion worth of Tesla stock in the last week, which suggests that he was trying to generate money for the huge acquisition. “No additional TSLA sales planned after today,” Musk said in a tweet on April 28. Reuters reported on May 2 that Musk is in talks with financial companies and high-net-worth individuals about taking up additional funding for the purchase so less of his money is tied up in the sale.

To keep up with the Twitter-Elon Musk saga, here are the essential facts:

What’s the rationale behind Musk’s purchase of Twitter?

One of the most vocal detractors of the programme is Tesla CEO Elon Musk.

During the month of March, Tesla CEO Elon Musk posted a poll to his followers that inquired whether or not they thought Twitter protected free expression. A majority of the 2 million people who took the survey responded “no,” and he stated the findings would be “extremely significant.”

“Failure to adhere to free speech rules weakens democracy since Twitter functions as the de facto public town square. It’s not clear what to do next.” In a follow-up tweet, Tesla CEO Elon Musk said. A bid to acquire Twitter was then made, with the caveat that it would have to be kept hidden if he was to succeed.

The First Amendment of the United States Constitution protects free expression from government censorship, but it does not apply to private firms like Twitter, which set their own guidelines for what is and is not permitted on their platforms.

When the deal was made public, Musk brought up free speech once again. Twitter’s algorithms will be made public, spambots will be wiped out, and all individuals will be authenticated by the service, he claimed.

There is so much potential in the social media platform Twitter, Musk stated. To unlock it, I’m looking forward to collaborating with the firm and the user community.

Social media corporations have been under fire from progressives for their failure to take action against damaging information, such as hate speech and harassment. It is claimed by conservatives that they are being suppressed. Claims that Twitter suppresses conservatives have been disputed for a long time.

Twitter rules “are fine if the most extreme 10% on the left and right are equally dissatisfied,” tweeted Tesla CEO Elon Musk on April 19.

In what way has Twitter reacted to this?

Twitter first seemed to reject the offer, but the board began to take it more seriously when Musk provided information about how he would fund the transaction. The firm has developed a “poison pill” approach that would make it more difficult for Musk to increase his ownership interest in the company. Twitter was prepared to accept a better offer if one came along.

Founder Jack Dorsey tweeted on April 15 that “as a public business, Twitter has always been ‘for sale.'” Publicly traded Twitter has had to cope with a number of challenges, including a number of management changes as well as layoffs. While he believes no one should own or govern Twitter, Dorsey said taking it back from Wall Street is the “right first step” towards regaining control of the company.

The idea and service is all that matters to me, and I will do whatever it takes to protect both. Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step.

— jack⚡️ (@jack) April 26, 2022

“However, Elon is the one answer I trust to solve the issue of it being a corporation,” Dorsey tweeted. “I believe in his aim to spread the light of awareness.”

What is Musk’s plan for Twitter?

With a net worth of 251 billion, Musk is apparently the wealthiest person in the planet.

SEC filings on April 20 said that Musk had received 25.5 billion in funding from Morgan Stanley and other financial institutions. About 21 billion in personal equity funding has been promised by Musk, he claimed.

What’s the next step?

There’s still a chance that Tesla CEO Elon Musk may back out of the acquisition, which still requires shareholder approval. According to an SEC filing on April 25, terminating the arrangement would cost Musk 1 billion because of a termination charge that is part of the agreement.

After the attempted coup, Twitter’s leadership is likely to shift again. CNBC reports that when the acquisition complete, Musk will serve as interim CEO. Since taking over from co-founder Jack Dorsey in November, Parag Agrawal is anticipated to remain on the company’s board of directors until the transaction is finalised. Also, according to unidentified sources, Musk indicated he will restrict on executive and board pay, as well as come up with new methods to create money. Two long-serving Twitter employees said this week that the company’s CEO urged them to quit their positions.

According to Bloomberg, while pitching the sale, the entrepreneur offered layoffs. According to reports, he also urged banks to encourage Twitter influencers and celebrities to use the site more often.