Elon Musk’s effort to purchase Twitter and take it private is allegedly close to an agreement with Twitter’s board of directors. According to Reuters and the New York Times, the board of directors might announce a deal as soon as Monday, accepting Musk’s original offer of $54.20 per share, or $43 billion.
According to the New York Times, Twitter’s board and Tesla CEO Elon Musk talked into the early hours of Monday about his offer to purchase the social media network. Musk said last week that he had secured $46.5 billion in funding to purchase Twitter, putting pressure on the board of directors to reach an agreement.
The Times and Reuters reported that the two parties were negotiating terms of the arrangement, including potential costs in the event that an agreement was signed and subsequently fell apart, citing unnamed persons with knowledge of the issue. Analysts expect a merger will be disclosed before Twitter’s first-quarter financial results are released on Thursday.
“Twitter announces results later this week, which are unlikely to be rainbows and smiles, placing more pressure on the firm surrounding this high-stakes poker game with the Musk offer looming,” wrote Wedbush Securities analysts Daniel Ives and John Katsingris in a research note.
Following Musk’s announcement earlier this month that he had purchased a stake in Twitter and was considering buying the business altogether, the board of directors enacted a poison pill anti-takeover strategy to stave off a hostile offer. According to The Wall Street Journal, which was the first to publish the current conversations, the board chose to negotiate after Musk amended his proposal to demonstrate he had secured finance. Twitter may also find it difficult to attract alternative bids, especially given the increased scrutiny of social media firms and their content moderation methods, which Musk has promised to downplay.
“The Twitter board was unable to locate a white knight, and now that Musk’s financing has been revealed, the clock has practically struck midnight for the board, which is why discussions to reach an agreement have commenced,” Ives added. The platform is valued at $54.20 a share, or $43 billion, according to Musk’s bid, which was disclosed on April 14.
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Musk claimed in the paperwork filed with US securities authorities last week that the funds will come from Morgan Stanley and other institutions, with part of it backed by his large ownership in Tesla. Twitter has yet to respond. Musk has stated that he wants to purchase Twitter because he believes the firm is not living up to its promise as a free expression platform.
He has recommended a variety of reforms to the social networking site in recent weeks, ranging from loosening content restrictions — such as the ones that terminated former President Donald Trump’s account — to addressing the platform’s issues with phony and automated accounts. According to Forbes, Musk is the world’s wealthiest individual, with a worth of almost $279 billion. However, much of his wealth is invested in Tesla stock: according to FactSet, he owns roughly 17% of the firm, which is valued at over $1 trillion. His privately held space firm, SpaceX, is also owned by him.
According to a pitch PowerPoint Mr. Musk delivered to investors, here’s what he sees for Twitter’s finances over the next four years. Musk has never been accused of having tiny dreams. With Tesla, his electric vehicle firm, and SpaceX, his rocket company, he has transformed at least two sectors, and his aspirations are now being carried over to his $44 billion acquisition of Twitter. Mr. Musk, the world’s richest billionaire, recently delivered a pitch deck to investors describing his lofty — some might say unbelievable — intentions for Twitter and its financial goals.
The presentation was obtained by the New York Times. Here’s how Mr. Musk envisions the social media service evolving in the next years. By 2028, revenue will have quadrupled to $26.4 billion. Mr. Musk stated in his presentation PowerPoint that he would boost Twitter’s yearly income to $26.4 billion by 2028, up from $5 billion the previous year. Twitter’s reliance on advertising has been reduced to less than 50% of its income. Advertising would account for 45 percent of overall income under Mr. Musk’s watch, down from about 90 percent in 2020. According to the study, advertising will bring in $12 billion in 2028, while subscriptions will bring in roughly $10 billion. Data licensing and other enterprises would provide additional money.
A payments firm must generate $15 million in sales. According to the plan, Twitter’s payments operation would bring in $15 million in 2023 and climb to $1.3 billion by 2028. Today, the company’s payments operation, which includes tipping and purchasing, is practically non-existent. Given that Mr. Musk helped popularize PayPal, the digital payments provider, there has been conjecture that Mr. Musk may integrate payment capabilities into Twitter. $5.39 increase in average income per user According to the memo, Mr. Musk expects to increase Twitter’s average income per user (a crucial indicator for social media businesses) to $30.22 in 2028, up from $24.83 last year.
By 2028, there will be 931 million users. According to Mr. Musk, Twitter’s overall user base will rise from 217 million at the end of last year to almost 600 million in 2025, and 931 million in six years. The majority of that increase will come from Twitter’s ad-supported services, such as Twitter Blue, which costs $3 per month and allows users to tailor their app experience. According to Mr. Musk’s pitch PowerPoint, Twitter Blue would have 69 million users by 2025 and 159 million by 2028.
By 2028, a mystery X should have 104 million users. Mr. Musk’s overall user estimates include what appear to be members of a new product dubbed X, which, according to the paper, will have 104 million users by 2028. Mr. Musk has alluded to offering an ad-free experience on Twitter, but the paper does not specify what X Subscribers is. In 2023, the X Subscribers product will debut on the pitch deck, with nine million users expected in the first year.
After laying off hundreds, the company hired 3,600 people. According to the plan, Mr. Musk expects Twitter to have 11,072 workers by 2025. This is an increase from roughly 7,500 today. Mr. Musk anticipates the number of jobs to vary in the meantime, rising to 9,225 in 2022, then falling to 8,332 in 2023 before growing again. According to a source familiar with the issue, Mr. Musk is expected to lay off employees as part of his acquisition before hiring fresh engineering staff. Costs for stock-based compensation are predicted to grow to slightly over $3 billion by 2028, up from $914 million in 2022.