By: Liibaan Yusuf
Early, April 2022, Elon Musk, tech mogul and pop culture superstar made a bold claim: he wanted to buy Twitter. But before we go into that you have to understand a few things.
Twitter is a public company, and public companies are different from the traditional idea of a brand or company. Instead of the original creator, or a mom and pop type business, public companies are owned by shareholders, each shareholder owning a certain percentage of the company, making it impossible for one person to own. Typically, the largest shareholders, usually those above 5%, come together as a board and are let in on company secrets adding their two cents in.
Musk attempted to purchase Twitter, becoming the largest shareholder, by buying everyone else’s shares. It would cost him approximately 44 billion dollars putting each individual share at 55 dollars. Musk, a name commonly associated with billionaires, planned to purchase Twitter through a quick fire sell off of Tesla stock, as he is the biggest shareholder in his own company, Tesla. He sold 9.2 million shares equaling about 8.2 billion US dollars. A large sale of stock leads to a depreciation of the market, and $TSLA fell 12% the following day.
After almost a month of deliberation, Twitter had accepted Musk’s offer on the 25th of April. Musk has been very vocal about taking Twitter off the public market. After Musk’s generous offer, about 1.5 times Twitters’ actual market cap, investors and finance analysts say Musk isn’t looking to make money on Twitter. As an established businessman and billionaire, it seems as if Musk is doing this for fun? As of, Wednesday, May 18th, there has been many moments of speculation of whether the deal will be called off or if it will go through.