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Elon Musk is serious with Twitter

Loading player In the last few days, new details have emerged about well-known US entrepreneur Elon Musk's plan to buy Twitter, announced last week. The information comes from some documents submitted to the financial regulators in the United States, which explain, for example, where Musk intends to take the approximately $ 46.5 billion needed to finance the acquisition.

With an estimated net worth of $ 260 billion, Elon Musk is the richest person in the world. His wealth derives in large part from ownership of Tesla stock, the well-known company that produces electric cars of which he is founder and CEO, and from various other financial activities. To finance the purchase of Twitter, Musk could pledge part of his shares, but according to analysts a transaction of this type could have repercussions on Tesla's performance on the stock exchange, already normally exposed to significant fluctuations.

In the documents presented this week, the investment company Morgan Stanley is instead indicated for the provision of a series of loans for a total of 25.5 billion dollars, with which to finance just over half of the operation announced by Musk. The remaining 21 billion dollars would instead be covered directly by the CEO of Tesla and SpaceX, although at the moment it is not clear what intervention on his assets.

After buying about 9 percent of Twitter shares in the past few weeks, Musk is currently one of the largest shareholders of the social network, but still does not control it. He had initially given his willingness to serve on the board of directors, with a deal that would have prevented him from over-ownership of 15 percent of the company's stock. Musk then thought about it, giving up the job and announcing a few days later that he wanted to continue with the acquisition of the company and withdraw it from the stock exchange, a step that he considers essential to reorganize it.

The purchase proposal had been substantially rejected by the Twitter board of directors, which had also signaled the possibility of increasing the number of shares in order to allow some of its shareholders to have more and preventing external takeovers. Musk responded by saying he had a “plan B”, but without giving details.

Part of the plan seems to be linked to the possibility of making a hostile takeover offer, that is, directly addressing individual Twitter shareholders without having the consent of the board of directors. Such an operation could prove risky for both the social network and Musk, should the Twitter board decide to prevent the acquisition.

Following the presentation of the new financial documents, considered a new signal about Musk's rather serious intentions, Twitter released a brief statement in which it confirmed that the company's board of directors “is committed to carrying out a thorough and thorough review to decide which actions taken to protect the interests of the company and of all Twitter shareholders “.

The documentation provided by Musk does not indicate other subjects besides Morgan Stanley for the loan, which seems to indicate on the one hand Musk's choice to proceed independently, on the other the skepticism of other investors, who for now see more costs than benefits in the acquisition of Twitter. The company has grown little in recent years, both in terms of users and value on the stock exchange, and it does not appear to many as a good investment, especially in relation to the amount of money needed to gain control.

On several occasions Elon Musk has argued that he does not want to acquire Twitter to “make money”, another detail that could discourage potential partners in the investment. Musk believes that Twitter should be a place to guarantee freedom of expression, even if in recent days he has shown that he has no great idea of ​​the implications of this principle, which all the major social networks have been dealing with for years. .

On Twitter, where he has around 83 million followers, Musk has made several references to the possibility of a “tender offer”, in the allusive way he often writes his tweets. For example, he published one in reference to Tender is the night, the novel Tender is the night by Francis Scott Fitzgerald, and another on the song “Love me tender” by Elvis Presley.

_______ is the Night

– Elon Musk (@elonmusk) April 20, 2022

🎶 Love Me Tender 🎶

– Elon Musk (@elonmusk) April 16, 2022

After submitting the new documents to regulatory authorities, Musk was more outspoken, writing: “If our Twitter bid is successful, we will either defeat all spam bots or die trying to do so!” The reference is to the large amount of fake profiles found on Twitter, often managed by automatic software especially to carry out scams and misinformation. Musk then added that to get around the problem he intends to introduce a “real human” authentication system.

If our twitter bid succeeds, we will defeat the spam bots or die trying!

– Elon Musk (@elonmusk) April 21, 2022

It is not yet clear what the next developments of Musk's initiative may be, but several analysts have begun to take his proposal seriously, now that an investment firm is involved and that there are new details on raising the money needed for the 'acquisition.

The next big developments could be related to Twitter's final quarter financial data presentation, which will take place on Thursday. The data could reveal important information for shareholders who will have to evaluate whether or not Musk's offer to buy their Twitter shares at $ 54.20 each is profitable.