Elon Musk's Offer to Buy Twitter
Elon Musk offered to buy Twitter outright, in cash, for $54.20 a share. The offer represents an 18.2% premium over the previous day’s close.
This story isn’t necessarily about digital assets. But it is of interest to Vault because Twitter is the de facto professional network of the crypto space. There is no other place where many people gather to talk about crypto and network. Discord may be a close second, but the chat platform is fundamentally different from Twitter—so Twitter still functions as the primary public square of the crypto space.
There are a few ways to break down Musk’s offer.
Is the offer real?
In the sense of ‘real,’ as ‘legitimate,’ then yes—the offer was filed with the SEC. In the sense of, “is this a serious thing that is likely to happen?” Maybe.
There are two things that Elon Musk knows how to do well.
Put on a show and generate hype—often by doing absurd things for effect.
Operate real-world companies and build them to massive scale and efficiency.
The trouble people have with Musk is that you never know which you will get based on any given headline.
For example, the same man who pioneered reusable rockets—shaking the dust off of the decaying space industry—is the same person who announced he had the funding to take Tesla private at $420 per share (a high-school-era joke about the funny-weed-number).
It makes sense that people are wary of these kinds of buyout announcements.
So is it real? Maybe.
What does Elon Musk want?
He claims that he wants to balance bias on the social network, enable free speech, and improve the platform by reducing bots and other spam. Thus improving the company and the platform and making both better for everyone.
There is also precedent for media company buyouts by billionaires. Re: Jeff Bezos and the Washington Post.
Musk is playing high-stakes poker with the largest bankroll the world has ever known. But given his personality, I honestly do not think this is about the money.
Is it about power and control? Maybe.
But at the end of the day, I think Musk likes Twitter as a social network. From his perspective, he sees a chronically stagnant company under siege by bots and scammers, led by incompetent management that is unable or unwilling to take the necessary steps to guide the social network forward.
To Musk, Twitter may appear as an operational puzzle of the sort he is drawn to solve.
What does Twitter want?
Does Twitter even know what Twitter wants? A simple edit button feature has been coming soon for eight years. Every attempt to reign in bots and spam has failed. Bots are rampant, and scams are prolific.
Twitter should want a better user experience and preserve its role as the internet's public square. But it doesn’t seem capable of rising to the task.
At the very least, Twitter’s board has a fiduciary duty to its shareholders to consider any generous offer, and Musk’s offer represents a significant premium over the current share price.
Some may consider this offer too low, as it falls well below Twitter's peak of $70 per share last year.
So there is the issue of what Twitter, as a company, wants and what it must do within its duties.
We will be left to see how this plays out as negotiations occur. One early indicator we have is the market reaction.
$TWTR jumped 5.5% first thing yesterday on the news of the offer.
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