Introduction
One of the most highly anticipated deals of this year was the potential Twitter acquisition by Elon Musk. The billionaire businessman and entrepreneur’s intention was to buy out the social media station and turn it into a private platform. While grand plans were made and a valuation of the company was estimated at $30 billion, the deal soon came to an end leaving many asking, did Elon Musk cancel the Twitter deal?
Background
As the founder of multiple corporations and renowned as a trailblazer in both the business and technological worlds, Musk has garnered a huge amount of attention since the announcement of his interest in buying Twitter. This move comes after his previous successes, from SolarCity to Tesla, and was seen as the public’s first major insight into what the ambitious entrepreneur planned to do with the social media giant.
Musk had already experienced success through his other endeavours and, according to reports, he had plans to take the platform further as a private company outside the watchful gaze of Wall Street. He was keen to ensure some kind of a payout for stockholders who would be leaving. The amount offered was $30 billion and it was believed the deal would pass on August 7th, 2020.
Reaction
The reaction to the potential Twitter acquisition by Elon Musk was rife with anticipation. Many were excited to see how the billionaire would shape the platform as well as the improvements he was prepared to make when it comes to prioritizing user experience. His promise of developing the interface into something more secure and capable of handling different kinds of user interaction was promising.
Problematically, his potential acquisition of the company did not seem to sit well with some of the major shareholders. One of Musk’s major partners for the venture, the Sovereign Wealth Fund of Saudi Arabia, had already experienced some negative press due to its alleged links to the murder of journalist Jamal Khashoggi. This prompted some concerns from investors and caused them to back out of the potential investment.
Data and Experts
Data surrounding the potential deal was limited due to how private Musk and his team of advisers were keeping it. A great deal more was revealed after the potential acquisition fell through and was cancelled. Markets reported fractional losses from the failed acquisition, with Tesla’s shares also taking a hit as expected. This was a result of requiring the use of investors’ funds for the purchase of the company which, in the end, was not realised.
Experts largely remained silent during the entire ordeal due to the potentially sensitive nature of the acquisition and to avoid taking a stance on either side. However, those that did comment on the situation stressed the importance of looking into the motives behind the cancelled deal and what it could mean for the social media station going forward.
Insight and Analysis
It appears as though Musk’s attempt to take Twitter private was thwarted by both internal and external factors. His partnership with the SWF of Saudi Arabia caused some troubled waters, with investors worried about the implications of such a move; and on the internal front, some of the major stakeholders involved seemed less than enthusiastic with the deal.
This turn of events could have a major impact on the company going forward, with questions being posed as to whether the attempted buyout will ever resurface; or if users of the station will continue to experience a mixed user experience for the foreseeable future, with flaws still present in the platform’s security.
Impact
The fallout from the cancelled deal has already been felt, with financial losses being reported from many of the major players involved. Tesla has not escaped this either, with the billionaires’ iteration of Twitter being deemed a major factor in the decline of its already troubled stock market performance.
As for the social station itself, the implications may be a little less noticeable. While users may still be expecting upgrades to the interface, this is yet to be seen given the setback. Elon Musk’s team of advisers may not be completely done with the potential buyout yet either, as there has been speculation Musk still may continue to pursue it, however it is too early to tell as of yet.
Legality
The would-be buyer and founder of many creative and innovative enterprises, Elon Musk, had to also consider the legality of such a move. It was an ambitious one as well, with large amounts of money, a passionate user base, and potential implications of a foreign nation involved in the proposed deal.
The legality of the proposed acquisition involved scrutinizing whether certain regulations had been met when it came to insider trading, price manipulation and security. A great deal of effort was placed into examining Musk’s motives and, had the deal gone ahead, it would have opened up a can of worms when it came to potential legality issues.
Stakeholders
The gathering of stakeholders involved in the attempted acquisition was one of the most paramount indications of its potential success. Unfortunately, the various investors involved most likely played the greatest role in the discontinuation of the deal.
From the major shareholders, to the ordinary users of the station and other high profile personalities and celebrities, the opinions of these individuals varied greatly. While some firmly stood by Musk’s decision to acquire the company, most focused on the intricacies of the business involved rather than its potential benefits for the users of the platform.
Costs
The costs involved in the potential acquisition were substantial and impacted those involved in a variety of ways. Elon Musk, undoubtedly the driving force behind the proposed takeover, was prepared to pay an estimated $30 billion to gain control of the company.
In order to make this happen, partnerships with major investors; such as the Sovereign Wealth Fund, had to be formed and an agreement in terms of ownership structure had to be made with both current and future shareholders. Unfortunately, this would not come to be due to the deal’s cancellation and the costs surrounding the process were ultimately wasted.
Politics
The political chatter surrounding this potential deal was widespread. This was because of the many sources of those offering opinions and interests involved in the acquisition. Ranging from the usual suspects of Wall Street, to foreign nations and political parties.
The nature of Twitter and its implications as a news source meant its sale was a hot button topic for many, with these various entities itching to express their opinions. However, it was not long until the details needed to make the deal happen surfaced and the discussion cooled off again.
Influence
The influence of Elon Musk’s proposed purchase of the social platform was wide-reaching. His notability and network of entrepreneurial ventures meant that any move he would make in the business space would inevitably grab the attention of the public.
For the potential sale of Twitter, this influence was no exception. His plans to acquire the station as a private company and alter its user experience were intrigue provoking and influential in how users of the station chose to perceive the platform.
Reality Check
In reality, the potential acquisition of the social media giant by Elon Musk never came to fruition. The various stakeholders that chose to back out of the deal, the private nature of the negotiations, and the foreign policy implications of the deal likely all played major roles in its cancelled status.
This means that, for now, Twitter will remain as a public platform, with Elon Musk’s grand vision for changing the user experience falling through for now. Whether or not he will choose to pursue this dream in the future, remains to be seen.
