The Tesla CEO Elon Musk has once again made it to the news headlines after taking a decision that has costed the blue bird company Twitter billions and gave people a reason to talk about plus also puts many to doubt for the trust issues.
On July 9, Elon Musk said that he was terminating his $44 billion deal to acquire Twitter. This comes less than three months after his unsolicited offer to buy the company and make it private.
This move is likely to start a potentially long legal battle between the mercurial billionaire and the 16-year-old social media firm. In a tweet on July 9, Twitter’s board chairman Bret Taylor said that they plan to pursue legal action to enforce the merger agreement and are confident that they will prevail.
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Here’s a monthly timeline of the Musk’s action series from him planing to buy the blue bird platform to backing out from the deal.
By the end of January, specifically after January 31, 2022 – Elon Musk quietly starts buying Twitter shares.
Musk’s stake increased to over 5%. It was in March only that Musk contacted Twitter co-founder Jack Dorsey to discuss the “future direction of social media”. In that discussion with Twitter executives, Musk says he is considering various options with respect to his ownership, including potentially joining the company board, seeking to take Twitter private or starting a competitor to Twitter, as per an SEC filing.
Musk’s stake in Twitter increased to 9.2%, making him the largest individual stakeholder in the firm and he disclosed this. Twitter CEO Parag Agrawal announced that Musk will be joining the Twitter board. Musk told Twitter executives that he would not be joining the Twitter Board and would be interested to make Twitter private which was rejected by the Twitter CEO. Musk offered to buy Twitter in a $44 billion deal, for $54.20 per share. Twitter board adopted a ‘poison pill’, defence strategy to prevent hostile takeover. However, Musk mentions he obtained commitment letters for around $46.5 billion in financing and this includes $21 billion in personal equity and $25.5 billion in loans. Twitter’s board also accepted Elon Musk’s offer to buy the social media company in a $44 billion deal and take it private on 25th April.
In this month, Elon Musk bagged $7.1 billion financing from Sequoia, Binance, a16z, Larry Ellison, others. He also revised his Twitter bid by increasing his equity commitment by $6.25 billion to $27.25 billion and reducing the margin loan from $12.5 billion to $6.25 billion. Agrawal announced a hiring freeze and other cost-cutting measures. By mid May, Musk said the deal is temporarily on hold over Twitter’s spam bots claim. Elon Musk says a lower price for Twitter deal is “not out of question”. In a tweet thread, Parag Agrawal explained Twitter’s spam calculation on how they found “less than 5%” of its users are spam or fake accounts. Musk said the deal cannot move forward without proof on fake accounts. Twitter’s board recommended shareholders vote to approve the merger agreement. Twitter board said it plans to ‘enforce’ the merger agreement. By th eend of month, the US Securities and Exchange Commission announced that it will be scrutinizing Elon Musk’s purchases of Twitter stock and whether he properly disclosed his stake or not. It also disclosed a letter sent to Musk on April 4.
On June 3rd, Twitter said the 30-day window for US antitrust regulators to block Elon Musk’s proposed $44 billion buyout expired on June 2. In a letter, Musk accused Twitter of “actively resisting and thwarting” his rights to data and information about spam and fake accounts on the platform, terming it as a “clear material breach” of the company’s obligations under the merger agreement. Twitter agreed to provide Musk access to its full “firehose” of all public tweets, to comply with his demands.
Musk met with Twitter employees virtually at a town hall meeting, fielding questions across a range of topics including content moderation and handling free speech, layoffs, remote work and future company plans.
In July again, Twitter did layoffs. They laid off 30% of its talent acquisition team. The company told The Wall Street Journal these job cuts impacted fewer than 100 people. By July 8, Elon Musk started trying to back out of the deal to buy Twitter, alleging that the company has not complied with its contractual obligations. In an SEC filing, Musk alleged that the social media firm has made false and misleading representations regarding spam and fake accounts on the platform.
And on 9th July Elon Musk backed out from the deal.
In this drama of six months, Musk came, played and left. Folow Social Nation for more social media updates.