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Why Does Elon Musk Buy Twitter?
With so many reasons to stop the deal, why does Elon Musk buy Twitter? In this article, we’ll look at Musk’s business plan for the social media company, his arguments against a deal, and his previous run-ins with the S.E.C. As an entrepreneur, you’ll want to be on the lookout for any reason that would cause Elon Musk to back out.
Elon Musk’s business plan for Twitter
Tesla and SpaceX chief executive Elon Musk’s business plan for Twitter has come under fire for a few reasons. Elon Musk has a history of saying ambitious things without a solid strategy, and it’s no surprise that he negotiated with Twitter without an outline of how he would run it or increase its revenue. But this new pitch deck is the first substantial blueprint for the company’s future.
Among the investors who have joined Musk in his bid for Twitter are Andreessen Horowitz, Larry Ellison, Binance, and the Qatari sovereign wealth fund. In addition to these investors, there are a number of private equity firms that are kicking the tires on a Twitter takeover. But while Musk has not publicly mentioned the possibility of walking away from the Twitter deal, it is unlikely that he would abandon his business plan. After all, he has experience with corporate turnarounds. And his recent comments to the press may give us a clue as to how he plans to turn Twitter around.
As Twitter’s user base grows, so do the company’s profits. Musk has said that he plans to eliminate 1,000 jobs at the company, roughly one seventh of the company’s workforce. He’s also suggested monetizing tweets in new ways. For example, he hopes to charge companies for embedding tweets from verified users, or for quote-tweeting them. The Twitter Blue subscription service could have a number of other features, including an ad-free interface, additional editing tools, and a blue verified checkmark.
Elon Musk’s arguments for termination
If you’ve been reading about Elon Musk’s arguments for termination of his Tesla contract, you’ve probably wondered how he could get out of the deal. Musk’s arguments aren’t terribly convincing. He has a history of public disdain and has publicly questioned his decision. Nevertheless, Musk’s argument is not entirely without merit. Below, we’ll take a look at his case and whether he should lose his job.
As Musk puts it, Twitter breached the terms of their agreement by failing to provide enough information on its spam accounts and misrepresenting the number of spam accounts on its site. Twitter also failed to consult Musk before firing senior employees. In short, the company failed to do its job and made a mistake in hiring Musk. Musk has three arguments for termination. These are: Twitter did not provide enough information on its spam accounts, it failed to inform Musk about bot activity, and it did not consult him when terminating other senior employees.
The court could force Musk to pay the termination fee or to buy the entire company. However, this scenario is unlikely as Twitter would be more likely to choose the latter option. Musk’s arguments could land him in legal trouble if evidence is found that he interacted with Twitter’s financiers. The company also likely will investigate whether Musk acted improperly in interfering with the lenders. If the case does go to trial, it will be a long and drawn out battle.
Elon Musk’s previous run-ins with the S.E.C.
The SEC is looking into whether Elon Musk broke a law by tweeting about a potential sale of Tesla stock. In October 2018, Musk was charged with violating the securities laws when he bragged that he’d secured funding to take the company private. Later, it turned out he’d been in preliminary talks with investors. Musk and Tesla settled the charges, and the SEC has agreed to clarify some of the tweets. But Musk was frustrated and is chafing at this new restriction.
The SEC argued that Musk misled investors in September when he posted a tweet accusing the SEC of being biased and threatening employees. The SEC wanted a judge to remove Musk as CEO, but Musk called the lawsuit “unjust.” The SEC and Tesla settled in October, with Musk agreeing to pay $20 million and step down as chairman and require pre-approval for material posts to the company’s Twitter account. Musk remains CEO.
This latest battle with the SEC comes amid an important week for SpaceX. It is scheduled to launch a Falcon 9 rocket with the Crew Dragon capsule at 2:49 a.m. on Saturday. The admonishment came as Musk’s lawyers claimed that their agreement didn’t cover his statement about the share price of the company’s shares.
