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Why Buy Twitter?
If Elon Musk is seriously interested in buying Twitter, he must be asking himself “why buy Twitter?” He has given several reasons, including his right to information. He says he has asked for a lot of information about Twitter. And if he doesn’t get it, his financing sources won’t finance the deal. Is there any chance that he’ll get what he wants without all the information?
Elon Musk’s stake in Twitter reaches 9.2%
Musk disclosed that he owns 9.2% of Twitter, worth almost $3 billion, triggering a 27% jump in Twitter shares. The move comes just weeks after Musk suggested building his own social network, which was rejected by seventy percent of his followers. In response, Musk said he would consider building a social network with minimal propaganda and free speech as its priorities. Since the tweets are so controversial, this deal might have opened the way for a potential buyout of the company.
After news of Musk’s investment spread, Elon tweeted a response that made some observers wonder if the company really needs a new platform. He said he is “giving serious thought” to starting a new social media platform, and his post comes two weeks after his SEC filing revealing his stake in the company. While Twitter hasn’t commented, Elon Musk’s stake could have a big impact on the company’s long-term strategy.
Musk says he wants to take company private
Elon Musk has taken some jabs at Twitter’s business model and its policies. He’s asked why more celebrities don’t use the platform and has targeted company executives responsible for policies aimed at removing offensive and illicit content. But what exactly does Musk want to do with the company? Will he end up buying it? Let’s find out. Here’s what he told Reuters.
According to sources, the deal Musk negotiated with Twitter includes a $1 billion break-up fee and a “specific performance clause.” In other words, if Musk doesn’t make the purchase, the board will have the power to reject it. The court will consider the information provided by Twitter and whether Musk’s requests for further disclosures are reasonable and necessary. The deal is likely to proceed if Twitter shares continue to drop as expected.
Criticisms of Twitter’s business practices
A recent survey of Twitter employees found that most are concerned about the direction of Elon Musk’s vision and potential changes to the company’s business practices. According to one respondent, Twitter and Musk are “disconnected” and their visions don’t align. Others voiced concerns about potential changes to company culture. While Musk’s criticisms were directed at Twitter’s business practices and policies, others took a more general view. Elon Musk has repeatedly criticised Twitter for making a profit from its products while denying the importance of ethical and socially responsible business practices.
SpaceX employees have largely condemned Musk’s Twitter behavior. While Musk has been tweeting with right-wing pundits and politicians, many employees have been focusing on his Twitter behavior and his criticisms of the Democratic Party. The SpaceX employees’ criticisms have garnered considerable attention, with employees focusing on Musk’s tweets about the Democratic Party and the media. However, it is unclear how much of this criticism will be considered legitimate.
Plans to finance deal with Tesla stock
The deal, which could cost as much as $33.5 billion, will come from a mix of equity financing and leveraged buyout. The amount of financing that Musk is planning to get from these sources will likely depend on how many shares he plans to sell. Tesla shares have dropped 25% since Musk announced his pursuit of the company. A tweet from Musk on Friday lifted Tesla shares 5%, suggesting that investors are getting a better deal than previously thought. However, the company’s shares are too high relative to its performance. Tesla’s P/E ratio is almost 90, and it is comparatively higher than most established companies.
Earlier this year, Musk sold $8.5 billion worth of Tesla stock to raise $7.1 billion in equity. The proceeds from this deal were used to fund his recent purchase of Twitter, which has a market value of $184 billion. In April, Musk sought to reduce his exposure by arranging a risky margin loan for the deal, but he scrapped that plan last month. The remaining $1.1 billion could come from a preferred equity in Twitter, which would pay a dividend, and rise in value in line with the equity value of the company.
Suit by Twitter to force Musk to complete deal
When Elon Musk offered to buy Twitter for an astronomical sum, he promptly backed out of the deal after the tech stock market tanked. If Musk was to succeed in his lawsuit, he would need to show that Twitter’s actions caused a material adverse effect or breached the contract. Musk chose to focus on the issue of “spam bots,” saying that Twitter had failed to provide enough information on fake accounts. Twitter’s legal team claimed that Musk had repeatedly made false statements to make his allegations true.
However, the leadership of Twitter believes that the company must protect user privacy and could fall foul of data privacy laws. This is what led Twitter to hire Wachtell, Lipton, Rosen & Katz, a law firm famous for defending companies from hostile buyers. The law firm is also represented by William Savitt, an attorney who has extensive experience in Delaware’s Chancery Court. He has successfully defended clients against a number of hostile takeover bidders, including billionaire investor Carl Icahn and Pershing Square, which is run by billionaire William Ackman. Twitter’s legal team is confident that Musk will not be able to successfully defend his company in court, since the Chancery Court is notoriously unpredictable.