It smells like a sale: everything indicates that Twitter will accept Elon Musk’s offer

Various reports mention that Twitter is analyzing the acquisition offer by Elon Musk from another perspective , who has managed to raise 46.5 billion dollars for this operation.


It seems to go. Twitter is already internally discussing Elon Musk ‘s multi-million dollar offer to acquire 100% of the company’s assets. After several days reporting back and forth on the subject, the talks between the board of directors and the South African businessman are already in the “final phase”.

Various reports suggest that Twitter is already fine-tuning the details for the final sale, and that the board of directors has changed its position on giving control to Musk , who acquired 9.2% of shares a few weeks ago.

According to the New York Times , the eleven members of the company have met with Elon Musk privately, and an agreement could become official this Monday.

Where does Elon Musk get the money from?

Last Thursday, Musk publicly presented his financing scheme for the final purchase of Twitter . As stated in the declaration, Morgan Stanley agreed to cover 13 billion dollars, while 12.5 billion was obtained as a loan from Tesla , an operation that would put him at the limit to access a new credit against shares.

To this sum are added the 21 billion dollars in cash that the businessman has to cover the total amount.

“The end of Twitter as a public company”

Reuters notes that the acquisition is one step away from completion after the offer made by Musk , although there is still a chance that the deal could be canceled at the last minute, according to sources consulted.

So far, the social network led by ParaG Agrawal , CEO of Twitter and successor to Jack Dorsey in office, has been leveraging a series of measures that seek to increase the company’s income under subscription and direct monetization models.

Although they are on track to achieve the projected results for 2023, the sale of the company would show that the current administration is not managing to increase that traction to generate money or make Twitter profitable in the short and medium term.

For the stock market, this sale could represent “the beginning of the end for Twitter as a public company with Musk probably now on track to acquire the company, unless a second bidder enters the mix,” according to Dan Ives, an analyst at of Wedbush Securities consulted by NYT.

Elon Musk and free speech issues

The Wall Street Journal points out that, during the meetings held between Elon Musk and some Twitter executives last Friday, issues associated with freedom of expression were discussed, an issue in which Musk would have confirmed his commitment to resolve them at the head of the company.

The meetings, held through video calls, would have caused a change of mentality in the directors of Twitter, who are discussing the offer on Monday. The outlet also notes that the deal could be announced today, according to its sources.

The crossroads of Twitter

After Musk’s announcement, Twitter has traded below the offer presented on April 14, which valued each share at $54.20. This indicator could be translated as a skeptical position of the shareholders regarding the possibility of selling the company.

However, after the announcement of the financing, the shares rose 4%, reaching $48.93.

The problem lies in the two paths, and this crossroads where Twitter is “inadvertently”. On the one hand, accepting Musk’s offer implies turning the company private and eliminating the participation of the current board of directors in future decisions, an issue that could be negotiated with Musk himself in these meetings.

The other path is not to accept the offer, a decision that triggers Musk’s withdrawal from the network and his investment as a shareholder, converting his 9.2% shares and reducing the price on the stock market.

This second option could fatally affect Twitter’s board, as shareholders expect there to be at least one response from the company to match or improve the coffers. Not accepting the offer necessarily implies that they are capable of remaining on the stock market.

In that case, the danger lies in time. Twitter must demonstrate that it can effectively present itself as solvent and profitable to investors. Since the company went public in 2013, it hasn’t made significant progress, and turning down Musk’s offer without an alternative that gives shareholders peace of mind is a huge risk for capital flight.