After Elon Musk’s offensive, Twitter responds

Hostile. This is saying little about the offer put forward by Elon Musk to buy Twitter. This Wednesday, April 13, the billionaire offered to put 43 billion dollars on the table to afford the platform. The boss of Tesla has submitted his « best and last offer » to the US stock market policeman (SEC). Already owner of Space X and NeuraLink, Elon Musk has owned 9.2% of Twitter since the beginning of April. This operation would allow him to obtain 100% of the shares and make the platform his own to defend his « freedom of expression ». The company’s board of directors has yet to approve this takeover. But it will be difficult for the leaders to slam the door in the face of the billionaire…

For now, Twitter has found the parade. The company announced on Friday April 15 that it had adopted a clause, nicknamed the « poison pill », to protect itself from this hostile takeover bid. Known across the Atlantic as the « Shareholder Rights Plan », this mechanism allows shareholders to buy back shares at a reduced price, if an investor were to acquire 15% or more of the shares. Twitter without the prior approval of the Board of Directors. A way to dilute the shareholding and increase the price to pay for Musk. Twitter specified that this « poison pill » will expire on April 14, 2023. At the same time, the investment fund Thoma Bravo LP would have approached Twitter to express its interest in mounting an alternative takeover offer to that of Elon Musk, Reuters learned from a source familiar with the matter.

Enough to keep the attacks of the boss of Tesla at a distance for a few more months. But not necessarily to the point of calming his ardor. Elon Musk has 82 million subscribers on the social network. He uses it to give his opinion or to survey the popularity of his ideas with his community, when he is not engaged in his favorite hobby: firing red balls at the operation of the platform. The wealthy entrepreneur regularly attacks Twitter and its moderation rules, which are too strict for his taste. This influential user does not lack verve against the current director of the group, Parag Agrawal, whom he went so far as to compare to Stalin, on 1^er December in a killer tweet.

An unfriendly takeover

So what is Elon Musk playing at? His approach is reminiscent of that of Donald Trump, who also likes to take power on the networks to express himself without moderation. The two billionaires, the first of whom calls himself a libertarian, share the same paradoxical relationship with the social network founded by Jack Dorsey. In January 2021, the former American president was banned from the social network after the attack carried out by his supporters against the Capitol. A year later, the president fought back and created his own platform, Truth social, « to resist the tyranny of the tech giants ».

After having toyed with the idea for a while, Elon Musk finally gave up launching his own social network. If he alludes to a mysterious « plan B » in the event of failure of the operation, the billionaire seems determined to rise in the capital of Twitter and to pull out the crowbar, if necessary, to set foot on the company board. He defended himself, in the document filed Wednesday with the SEC, to want to exert the least blackmail on the company and advances his interest for the growth of the group. “Since investing in Twitter, I have realized that the business will not thrive and serve its social imperative in its current form,” he explains in his official takeover letter.

200 million users

Elon Musk’s offer comes at a critical time for the company. It comes shortly after the departure of Jack Dorsey, last November. The platform has experienced limited growth over the past two years, although it has broken even for the first time. « Twitter has long remained in the shadow of Facebook with advertisers, explains Nicolas Rieul, president of the Internet Advertising Bureau (IAB). Jack Dorsey had the intelligence to refocus the platform on its own identity, while developing advertising and monetizing content at your own pace, without chasing others. »

The platform now has more than 200 million users worldwide. It has the ambition to find 100 million by 2023. A lower audience than that of Facebook, which allows it to generate more than 5 billion dollars in revenue for the year 2021, or 37% more than in 2020. A trajectory that could be called upon to continue, at a good pace, if Twitter managed to push its paid offer, Twitter Blue. A subscription service, which allows its users to browse the platform with fewer ads and to « personalize their experience » for a few dollars a month.

The « Citizen Kane » of the digital world

On the sidelines of the TED 2022 conference held Thursday in Vancouver, Elon Musk said he was in favor of making certain features, such as TweetDeck, a tweet management tool, chargeable. He also wants to add a button to be able to « edit » his posts once published. « Twitter has kind of become the default public square. It’s very important that people have both the reality, and the perception, to speak freely within the bounds of the law. » The billionaire has been careful, on the other hand, to comment on the operations in progress and is content, until then, to publish sibylline messages on his Twitter account.

I made an offer https://t.co/VvreuPMeLu

— Elon Musk (@elonmusk) April 14, 2022

At 54.20 dollars a share, never before has a billionaire made such a takeover bid against Twitter, with the exception of Marc Benioff. In 2016, the boss of Salesforce had planned for a time to buy the platform for the sum of 20 billion dollars, before giving it up under pressure from his shareholders and those close to him, as he recounts in his book, trailblazer, published in 2019. Elon Musk’s offer could be stronger. This takeover bid would increase the company’s stock market valuation from $36 billion to $43.3 billion, an increase of 32% on the share price as of April 3. Something to give wings to the little blue bird.

The richest man in the world has nothing to lose in this operation, which represents only 16% of his fortune. The latter has been estimated at 267 billion dollars in 2022. The one that the New York Times Thursday compared to the character of Citizen Kane in the film by Orson Welles seems ready to do anything to afford what he has been dreaming of for some time. A social network in his name and full control over the strategy of the platform. A point of honor for Musk who, if he failed, could « reconsider his position as a shareholder ». But always, without exerting the slightest pressure, of course…

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