Timeline of events leading up to Musk’s acquisition of Twitter
On September 28, 2018, Twitter’s stock price dropped by 12% when it reported a decline in monthly active users (MAU). This drop in stock price prompted a shareholder revolt, with shareholders calling for an outside board member and threatening a lawsuit. The following day, on September 29, Elon Musk, who owns almost 20% of the company, tweeted that he was “considering taking Tesla private at $420. Funding secured.” This tweet, which was supposed to be an internal communication with Tesla’s board, was made public due to a glitch in the “shareholder-only” mode of the company’s messaging app, resulting in a regulatory investigation by the SEC and a drop in Tesla’s stock price. On October 8, 2018 Twitter’s stock price hit a one-year low and the company announced that it was laying off 9% of its employees. On October 22, 2018, Twitter’s stock price reached an all-time low and the company’s market cap fell below that of its 2012 IPO. On October 23, 2018, Elon Musk submitted a bid to buy Twitter at $18 a share, valuing the company at $23 billion. On October 25, 2018, Musk raised his offer to $20 million a share, valuing Twitter at $34 billion. On October 29, 2018, shareholders approved the acquisition, making Twitter the first publicly traded company Musk has acquired.
Free speech is essential to a functioning democracy.
Do you believe Twitter rigorously adheres to this principle?
— Elon Musk (@elonmusk) March 25, 2022
Overview of Musk’s acquisition of Twitter
Musk’s acquisition of Twitter is among the most peculiar and unlikely in the history of the tech industry. Prior to Musk’s acquisition, Twitter was in decline, with declining MAUs, user engagement, and stock price. Its CEO had resigned and the board was struggling to find a replacement. Even so, the company was still generating billions in revenue. There are numerous theories attempting to explain why Musk wanted to buy the ailing company. Some people think Musk wanted to buy Twitter so that he could have an outlet for his presidential aspirations without having to go through the hassle of setting up a presidential campaign. Another theory is that Musk wanted Twitter so that he could have an avenue for propagating his message without having to go through the “fake news” filter of the mainstream media. The most likely explanation for Musk’s interest in Twitter, however, is that he saw an opportunity to acquire a company for a bargain basement price. This theory is supported by the fact that Musk named the price he was willing to pay for Twitter a mere $20 million above the company’s all-time low valuation.
Changes implemented under Musk’s leadership
Musk has already begun to implement changes at Twitter to turn the company around. Among other things, Musk has appointed Jack Dorsey as CEO and Vijaya Gadde as the interim general counsel. Given Musk’s track record of successful turnarounds, it is likely that he will be able to turn Twitter around. One of the first steps Musk took to turn Twitter around was appointing Dorsey as CEO. Dorsey is the founder of both Twitter and Square, a successful mobile payments company. Given Dorsey’s track record of success, it is likely that he will be able to turn Twitter around. Another early sign of Musk’s success in turning Twitter around came on November 8, 2018, when Twitter’s stock price rose by more than 15%, reaching its highest mark since September 2017.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
The impact of Musk’s acquisition on the tech industry
The immediate impact of Musk’s acquisition on the tech industry is that it has significantly increased the value of the equity in Twitter. Given the fact that Musk purchased Twitter for the price of a few of Tesla’s luxury electric cars, the acquisition has significantly increased the value of the equity in Twitter. In fact, Musk’s acquisition has increased the value of Twitter’s equity by a whopping $28.6 billion. This is a significant increase. The question, though, is where this increase in the value of Twitter’s equity will come from. The value of Twitter’s equity is unlikely to increase due to increased profits, given that the company is already bleeding billions in losses each year and has no path to profitability. Given the fact that the value of Twitter’s equity is unlikely to increase due to increased profits, it is likely that the value of Twitter’s equity will increase due to the company being acquired for a higher price. Given that Musk has acquired Twitter for a price of $34 billion, compared to the $28.6 billion value of Twitter’s equity, it is likely that the value of Twitter’s equity will increase due to the company being acquired for a higher price.
Taking Twitter private at $54.20 should be up to shareholders, not the board
— Elon Musk (@elonmusk) April 14, 2022
The implications of Musk’s acquisition on the tech industry
The implications of Musk’s acquisition of Twitter are twofold. First, by acquiring Twitter, Musk is demonstrating that he is able to acquire companies for mere fractions of their actual worth. This is significant, because it could encourage other would-be acquirers, such as Alphabet and Amazon, to acquire Twitter for a lower price than Musk paid for it. Secondly, by acquiring Twitter, Musk is likely to transform the company into a successful and profitable company. This is significant because it would mean that Musk could prevent the government from shutting down Twitter at a time when President Trump is waging a war on “fake news” and attempting to silence his critics.
I hope that even my worst critics remain on Twitter, because that is what free speech means
— Elon Musk (@elonmusk) April 25, 2022
What the future holds for Twitter under Musk’s leadership
Given the fact that Musk has already demonstrated how he intends to turn Twitter around, it is likely that he will continue to turn the company around, turning it into a successful and profitable company. Given the fact that Musk is a visionary who has already revolutionized industries such as aerospace, automobile, and energy, it is likely that he will be able to revolutionize Twitter as well. Once Musk turns Twitter around, the government is likely to be unable to shut down the company due to “fake news” and will not be able to silence Musk’s political opponents. Given the likely outcome of Musk’s acquisition of Twitter, it is clear that the future holds great things for Twitter under Musk’s leadership.
I was told ~1200 RPCs independently by several engineers at Twitter, which matches # of microservices. The ex-employee is wrong.
Same app in US takes ~2 secs to refresh (too long), but ~20 secs in India, due to bad batching/verbose comms. Actually useful data transferred is low.
— Elon Musk (@elonmusk) November 14, 2022
Analysis of Musk’s acquisition of Twitter
It is difficult to predict the outcome of Musk’s acquisition of Twitter, given the fact that the deal is unprecedented and there are no comparable precedents. Given the fact that the acquisition is unprecedented, it is difficult to predict the outcome. However, given the fact that Musk has revolutionized industries such as aerospace, automobile, and energy, it is likely that he will be able to revolutionize Twitter as well. Once Musk turns Twitter around, the government will be unable to shut down the company due to “fake news” and will not be able to silence Musk’s political opponents. It is clear that the acquisition has significant implications for the tech industry, and the only thing left to do is to wait and see how things turn out.
Should I step down as head of Twitter? I will abide by the results of this poll.
— Elon Musk (@elonmusk) December 18, 2022
Conclusion
The acquisition of Twitter by Elon Musk is among the most peculiar and unlikely in the history of the tech industry. It is unclear how or even if Musk will be able to turn the company around. What is clear, however, is that the acquisition will have significant implications for the tech industry. Given the fact that Musk is a visionary who has revolutionized industries such as aerospace, automobile, and energy, it is likely that he will be able to revolutionize Twitter as well. Once Musk turns Twitter around, the government will be unable to shut down the company due to “fake news” and will not be able to silence Musk’s political opponents.
