Elon Musk Twitter Bid Restructured and Nearly Complete
The Elon Musk Twitter buyout would still push through if you were wondering. However, there were a few changes to how the Tesla CEO will complete his takeover. Specifically, he changed how he would fund this social media platform buyout.
It is good to keep up with these updates if you’re a Twitter user. After all, Elon Musk could change how your favorite platform will function soon. People outside the network should stay tuned as this will impact a significant portion of the world.
First, let’s talk about the recent development regarding the Elon Musk Twitter takeover. Then, we will go through the other details of the SpaceX CEO’s bid. More importantly, we will discuss how Musk would alter how the platform functions.
Elon Musk Twitter buyout will soon close.
Elon Musk is in talks to raise enough equity and preferred financing for his buyout of Twitter to avoid the need for a margin loan linked to his Tesla shares https://t.co/1RLgcPPChm
— Bloomberg Markets (@markets) May 12, 2022
The millionaire Dogecoin enthusiast recently announced his new plan to fund his Twitter takeover. The recent filing from the US Securities and Exchange Commission confirms this.
According to that document, Elon Musk raised the equity component of the deal. In other words, he increased the amount he would use from personal assets.
That allocation was $21 billion on April 25, but now it is $33.5 billion. The new balance meant that the Tesla CEO would no longer depend on “margin loans.”
These are loans that have Tesla stock as collateral. Musk’s decision came after the price of Tesla shares crashed from $1,022.37 on April 13 to $658.80 on May 25.
The decline constitutes a 36.1% decrease in value within that period. Multiple factors brought about this steep decline, such as market downturns and recession fears.
Tesla stock also makes up the majority of Elon Musk’s net worth. It is valued at $218.8 billion right now, a decrease of roughly $66.5 billion over the past months.
Tesla’s stock price fall means that its CEO will need to get margin loans from borrowers, except for less favorable terms. Lenders could use Musk’s margin loans to buy his stock at a lower price as it plummets.
This recent development could be why Elon Musk filed an update on his Twitter acquisition on May 5. The latest SEC filing states that he reduced the margin loans by $7.139 billion, with funding from 19 investors.
Musk will still have to obtain new margin loans to cover the updated sum. The Financial Times recently reported that the Tesla CEO would request existing shareholders like Jack Dorsey to support his bid.
Twitter CEO Parag Agrawal stated that the company would soon complete Musk’s purchase during a meeting. Yet, he reiterated that he and his team would stay focused on their work.
Reactions to the Elon Musk takeover
Photo Credit: www.reuters.com
People had mixed feelings upon hearing about the Elon Musk Twitter acquisition. He announced the bid for this takeover on April 26, so folks immediately jumped to post reactions.
Some people saw it as a selfish maneuver from a billionaire to rid the internet of negative comments about himself. Anyone who owns such a massive platform could do that, after all.
Other folks worried that Elon Musk would allow misinformation, hate speech, and disinformation on Twitter. He announced that he advocates for free speech, but those people still feared such consequences.
After all, Musk stated that he would allow former US President Donald Trump into the platform by reversing his permanent ban. People recalled his supporters who stormed the Capitol building on January 6, 2021.
On the other hand, people saw it as a positive step toward improving the social media network. Musk’s pursuit of free speech would allow more points of view and people on the platform.
Many people simply poked fun at the SpaceX CEO’s latest plans. They posted so many memes and jokes about the Elon Musk Twitter acquisition.
After all, the Tesla CEO had a few wacky decisions, such as avidly promoting the cryptocurrency Dogecoin (DOGE). He also appeared on a Saturday Night Live skit as Wario, the video game character.
Read More: Elon Musk Put Twitter Takeover “On Hold”
The changes that Musk could bring to Twitter
Photo Credit: www.newyorker.com
Elon Musk mentioned a few adjustments he would implement once he acquired Twitter. Look at the following list for more details:
- Open-source algorithm – In an interview, he told the head of TED, Chris Anderson, that Twitter should “open source the algorithm.” In other words, he will reveal how the platform promotes and demotes accounts.
- Reduced content moderation – Musk said Twitter should only remove speech not permitted by law. If a message belongs to a gray area, he said he would leave it be.
- Edit button – The Tesla CEO posted an online survey asking Twitter users if they should be able to revise tweets they have published. Roughly 73% responded “Yes” to this poll.
- Remove spam – The Elon Musk Twitter acquisition got suspended weeks ago due to reports of fake accounts. That is because the SpaceX CEO’s primary objective for buying the platform was to take down “spam and scam bots” and “bot armies.
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Conclusion
Elon Musk will use more personal assets for his Twitter acquisition. The decision came after Tesla’s stock value declined significantly. However, Musk will still need to fund the takeover with margin loans.
Note that this information may change by the time you read this article. If you want the latest updates, you should stay tuned to all relevant online channels.
You could begin by following Inquirer USA. The site provides the latest updates about the Elon Musk Twitter bid and other significant trends.
Frequently asked questions
Will Elon Musk still push through with buying Twitter?
Elon Musk will still pursue his plan to purchase Twitter. However, he will use more personal assets instead of margin loans for funding.
Why does Elon Musk buy Twitter?
Elon Musk wanted Twitter to promote free speech. He will reduce content moderation and show the algorithm once he acquires the platform.
How will Elon Musk change Twitter?
The Tesla CEO wants an edit button, an open-source algorithm, and reduced content moderation for the social network. Musk will push through with buying Twitter, but he just restructured the funding.
How much money will Elon Musk spend on buying Twitter?
The SpaceX CEO will soon purchase Twitter for $44 billion. However, he had to adjust the funding allocation from relying on margin loans to using more personal assets.
How will Elon Musk complete the transaction?
Elon Musk will use more equity instead of margin loans. He increased the personal asset allocation to $33.5 billion and decreased the latter by $7.139 billion.
