"It looks like Elon Musk and Twitter are now officially tying the knot, but — like any A-list union worth caring about — the drama has been both plentiful and at times hard to follow. Here's everything you need to know:"
Ok, start at the beginning — how is Elon Musk involved?
The saga first began after Musk unexpectedly purchased a 9.2 percent stake in Twitter at the beginning of April, making him the company's largest outside shareholder. The TWTR share price subsequently skyrocketed by more than 20 percent.
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Musk — an avid Twitter user — had in recent weeks publicly criticized the platform ("Is Twitter dying?" he wrote to his some 82 million followers on April 9, citing often-inactive but highly-followed celebrity accounts) and what he believes is its worrisome position on free speech.
It was unclear at the time of purchase what exactly the Tesla CEO planned to do with his newly-acquired passive stake, and speculation immediately began rolling in. "I think he intends to go active and force change," Dan Ives, managing director at Wedbush Securities, told CNN. "This is a shot across the bow at Twitter's board and management team to start discussions."
Twitter shortly thereafter announced Musk would be joining its 11-person board for a term expiring in 2024 … only for Musk to back out of the position within a week.
Then, in perhaps his "boldest move yet," Musk on April 14 offered to buy Twitter altogether in an unsolicited, roughly $44 billion bid, with plans to take the public company private and turn it into "the platform for free speech around the globe." Twitter said it would "carefully review" Musk's proposal.
While all interested parties waited for that decision, Musk made clear his proposal at $54.20 a share was his best and final offer.
And finally, on April 25, Twitter officially accepted Musk's $44 billion proposal. Once the transaction is complete, Twitter will become a private company wholly owned by Elon Musk.
What are the other ways this could have shaken out?
There are several ways this could've gone. In one scenario, Musk could have taken his buyout bid to shareholders directly in what's known as a tender offer. In doing so, Musk could have possibly persuaded the board — with enough shareholder support, that is — to withdraw its poison pill. In a bout of his classic internet trolling, Musk had also been sending out cryptic tweets that include or very obviously omit the word "tender," likely in reference to such a maneuver. He also explicitly confirmed the strategy was something he was considering.
But then there was the question of how Musk planned to pay for his purchase. On Thursday, Musk revealed he'd lined up $46.5 billion in funding to back his bid, lending some credibility "to what had, until now, looked more like a personal lark than a bona fide takeover play," the The Wall Street Journal writes. The financing commitments shake out to about half bank debt, half cash from Musk. More specifically, there's $25.5 billion lined in up debt and loans from institutions including Morgan Stanley, Bank of America, and Barclays, and a personal $21 billion equity commitment from the billionaire himself, per the Journal. A portion of the bank debt is secured against his shares of Tesla stock.
Considering Musk's "best and final" offer of $54.20 per share amounts to roughly $43 billion, the extra $3.5 billion in financing unveiled Thursday "likely accounts for the company's outstanding bonds, which might have to be repaid, and the hundreds of millions of dollars in fees that will go to Wall Street banks if the deal gets done," the Journal posits.
There was also a chance Musk could've teamed up with other equity partners to back his bid — sources say he had spoken with some.
Even as the negotiations played out, Musk retained the option to withdraw his bid and sell his share of the company entirely, a possibility to which he alluded too, NPR notes. In a letter to Bret Taylor, chair of Twitter's board, Musk said he'd need to "reconsider my position as a shareholder" if his buyout proposal was turned down. Such a retreat could have sent TWTR's share price plummeting.
Twitter could have likewise "[tried] to find an alternative buyer … or even [opened] up a formal public sale process" to fend off the Musk drama, NPR writes. The company initially brought on Goldman Sachs and JPMorgan Chase to work as advisers, and other acquisition options were likely being actively evaluated in the interim, analysts have said. Private equity firm Thoma Bravo was rumored to be a possible buyer, as was buyout firm and Yahoo owner Apollo Global.
Once the transaction is complete, what might change?
In addition to likely relaxed moderation and adjustments in corporate structure that come with going private, Musk has already floated the idea of an "edit button" as a possible change to the platform.
He's also suggested Twitter disclose its algorithm to the public, though open sourcing would come with its own set of challenges and limitations, per CNN.
Further, Musk said the company's board of directors wouldn't receive a salary should he take over. "Board salary will be $0 if my bid succeeds, so that's ~$3M/year saved right there," Musk tweeted.
And finally, many have wondered if Musk could and would reinstate the account of permanently suspended user former President Donald Trump. He hasn't yet explicitly addressed Trump's suspension, but he has recently made the case for platform "time outs" rather than "permanent bans." That said, Trump apparently has no plans to come back.
How did the public initially react to this?
Some right-wing commentators, who have long decried Twitter as biased toward Democrats, have appeared to welcome the idea of a Musk takeover.
Meanwhile, Twitter employees weren't exactly jumping for joy, and many Democrats and other Trump critics received the initial news with alarm.
Updated 3:43 p.m. ET on Monday, April 25: This story has been updated throughout to reflect Musk's purchase of Twitter.
