Video Producer: Shohini Bose
Video Editor: Prajjwal Kumar
After months of negotiations, lawsuits and speculation, billionaire Elon Musk has finally added Twitter to his portfolio of companies which include the likes of Tesla and Space X.
On Thursday, 27 October, a day before a court-ordered deadline, Musk finalised his purchase of Twitter and immediately fired key executives, including CEO Parag Agarwal. He also dismissed the company’s CFO, top counsel, and the company's public policy head.
The move, coupled with Musk’s statements during the course of the acquisition, was a clear sign, that Musk wants to rejig the social media micro-blogging company.
Musk has vowed to transform Twitter’s business model, take it private and manage issues of harassment, abuse, and fake news. His acquisition comes after a months-long legal battle after he made multiple attempts to escape the deal for more than one reason.
But after all the twists and turns, Musk surprised the world and went ahead to buy Twitter after all. Here’s a short recap of the tumultuous deal.
Timeline
27 March 2022: After privately informing Twitter of his growing stake, Musk beings talks about potentially joining the board.
4 April 4: According to a regulatory finding, Musk rapidly became the largest shareholder of Twitter.
5-11 April : Musk is offered a seat on the board, which he ends up not taking.
14 April: Musk offers to outrightly buy Twitter for about $44 billion.
25 April: Musk reaches a deal to buy Twitter for $44 billion and plans to take the company private.
13 May: Musk announces that his plans to aquire Twitter is “ temporarily on hold.”
6 June: Musk’s first threat to end the $44 billion agreement to buy Twitter.
8 July: Musk says he will abandon the offer after Twitter failed to furnish enough information about the number of fake accounts. Twitter threatens to file a suit against Musk.
12 July: Twitter files lawsuit against Musk to make him complete the deal. Musk countersues.
19 July: A Delaware court judge says that the dispute will only go to trial in October.
23 August: Former Twitter head of security Peiter Zatko claims that Twitter misled regulators about its negligence in rooting out fake accounts.
4 October: Musk offers to go through with the original $44 billion proposal. Twitter says that it will try to close the deal after receiving Musk’s offer.
6 October: Court asks both parties to reach an agreement and finish the deal by 28 October.
26 October: Before the deal, Musk arrived at the Twitter Headquarters in San Francisco and brought a sink with him.
January to March: An Idea Is Born
Musk, a self-proclaimed free-speech absolutist, has also been a fierce critic of Twitter, where he has nearly 85 million followers, especially over its restriction of free speech.
He indicated that he was giving "serious thought" to building a new social media platform. Several of his followers suggested that he should just buy Twitter instead of building a platform from scratch.
However, it is possible that he was already considering purchasing Twitter at this point, or at least joining its board to influence decision making.
That's because he had secretly been amassing Twitter shares from 28 January. By 14 March, Musk already had over a 5 percent stake.
Early April: An Invitation to the Board
In an SEC filing on 4 April, Elon Musk revealed to the world that he had become Twitter's largest shareholder. By this time, he had built up a 9.2 percent stake worth about $3 billion.
On 5 April, CEO Parag Agrawal announced that Musk had been invited to Twitter's board, causing the company's stock to jump 27 percent.
Twitter's employees were unhappy at the announcement. Several felt that Musk's involvement could damage the culture of the company.
A week later, Elon Musk decided not to join the board, likely because of a stipulation that a director of the board isn't allowed to own more than 14.9 percent of Twitter stock.
Mid April: An Offer Is Made
In a letter delivered to Twitter on 13 April, Musk offered to acquire “all of the outstanding common stock of the issuer not owned by the Reporting Person for all cash consideration valuing the Common Stock at $54.20 per share."
This offer, which represented a 38 percent premium over the 1 April price, and valued the company at around $43 billion, was made public the next day.
In his letter, he told the board that the company:
"Twitter has extraordinary potential. I will unlock it."
Twitter was cold towards the "unsolicited" offer, partly because Musk had shared no details about how he would conjure up more than $40 billion.
On April 15, the company said that its board of directors had unanimously adopted a so-called 'poison pill' defence that would dilute Musk's shares if he attempted a hostile takeover.
Meanwhile, Twitter shareholder Marc Bain Rasella sued Elon Musk, claiming that his delay in disclosing his stake kept the share price down, allowing him to continue buying more shares at a lower price.
April End: A Deal Is Inked
On 21 April, Musk unveiled a fairly detailed $46.5 billion financing package. He would take $13 billion from banks as loans, borrow $12.5 against his own equity, and come up with $21 billion himself, presumably by selling some of his shares.
Musk also formed three new holding companies to facilitate the purchase.
The plan wooed Twitter shareholders who pressured the board to commence negotiations with the Tesla CEO.
On 25 April, Twitter officially announced that "it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk,” in a transaction valued at $44 billion.
Musk said he would make Twitter "better than ever" with new features, open source algorithms, defeating the spam bots, and authenticating all humans.
May: Deal 'Temporarily on Hold'
In May, reports emerged that Elon Musk told potential investors that he plans to take the company public again within a few years, likely to fuel the interest of potential investors.
The plan seems to have worked because the billionaire secured new financial commitments of around $7.1 billion from 19 investors to move forward with the takeover.
Then, on 13 May, Musk tweeted that the "Twitter deal is temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 percent of users."
Subsequently, now former CEO Parag Agrawal tweeted a fairly detailed rebuttal to the Tesla CEO’s concerns and possible intentions to kill the deal over the presence of spam accounts. In response, Musk tweeted a poop emoji.
July: Lawsuit vs Lawsuit
On 12 July, Twitter sued Musk in an attempt to force his hand and make him go through the buyout. The company alleged that Musk acted in bad faith and used bots as a pretext to exit the deal which had become costlier due to falling tech stocks.
"Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests," Twitter’s legal team alleged.
On 29 July, Musk played the reverse card and sued Twitter, holding that Twitter misled him over the presence of fake accounts and accused them of fraud.
August–September: The Whistleblower Revelation
In a striking revelation, on 23 August, The Washington Post reported that former Twitter Security Chief Peiter “Mudge” Zatko filed a whistleblower complaint against widespread concerns which put user and company data at major risk.
Twitter instantly pushed back, calling Zatko a disgruntled former employee with inaccurate and outdated allegations.
On 9 September, Musk amended his lawsuit against Twitter, including Zatko’s claims in the updated suit. In a few days, on 13 September, Twitter shareholders approved Musk’s $44 billion bid.
October: The Deal is Done
As the original date of trial neared, Musk surprisingly announced that after all the hubbub, he’ll buy Twitter only if the social media company drops its lawsuit against Musk.
The court postponed the trial and gave musk time till 28 October to complete the deal.
A few days before the court’s deadline, Elon Musk changed his Twitter bio to “Chief Twit” and subsequently tweeted a video captioned “Entering Twitter HQ – let that sink in!”
The video showed Musk carrying an actual sink into the company’s San Francisco HQ.
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