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Elon Musk Is Buying Twitter Again After Backlash On His Plan To End The Ukraine War

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Key Takeaways

  • Elon Musk tweeted a proposed solution to the Ukraine war, which included handing over parts of the country to the Russians and dropping their application to join NATO.
  • It was met with widespread backlash, and in the subsequent days he announced would be going ahead with his purchase of the company.
  • This continues a twisting saga and on again/off again takeover bid that has now ended up in a Delaware courtroom.
  • Musk also tweeted after the u-turn that buying Twitter was an important step in building X, the everything app.

This week the long running saga of Elon Musk buying Twitter and turning it back into a private company took a new twist, with the Tesla CEO now reported to be going ahead with the sale. It’s a major u-turn given that there is currently a lawsuit grinding its way through the courts which aims to force Musk to go ahead with this deal.

Looks like the lawyers might be able to have Thanksgiving off after all.

This surprise announcement was confirmed on Tuesday when Musk’s lawyers filed a submission with the court stating that he would be proceeding with the original deal as agreed.

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Many on Twitter were quick to point out that this came swiftly off the back of Musk weighing in on how to end the war in Ukraine. His suggestions included Ukraine surrendering large parts of the country to the Russians, including the much disputed region of Crimea and dropping their application to NATO.

His comments were widely met with a mixture of mockery and disdain, including from high profile figures such as Ukrainian President Volodymyr Zelenskyy, senior Ukrainian ambassadors and chess grandmaster turned anti-Putin campaigner Garry Kasparov.

The Kremlin praised Musk for his proposal.

This Twitter storm was raining down on Monday, and then on Tuesday Elon Musk’s lawyers filed papers with the court confirming that he would be buying Twitter after all. Probably nothing.

In all seriousness though, it’s unlikely that the Twitter backlash has anything to do with this decision. This is far from the first time Musk has courted controversy on the platform, and it’s unlikely to be the last.

In fact, with the company under his control and the power to shape the platform the way he sees fit, we may see even more of Musk’s thoughts and ideas than we do now. That’s a fascinating, and somewhat frightening, thought.

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What we know so far about the Twitter deal

It was back in April that Elon Musk had an offer accepted to purchase Twitter outright. As a publicly traded company, the takeover bid needed to reach approval from shareholders, which it did at a price of $54.20 per share.

It’s not too much of a surprise given that the stock was hovering around $38 in the weeks leading up to the announcement and had been as low as $32.42 back in February.

With the offer accepted and plenty of Tweets flying from Musk’s account about his plans for the platform, the due diligence process began. That’s where the problems started.

Elon Musk alleged that the number of fake accounts on Twitter were much higher than he had originally been led to believe. According to Musk, he requested detailed information on these so-called ‘bots’, but wasn’t satisfied with the response from the company.

Off the back of this, he announced that he would no longer be proceeding with the purchase. But it’s not quite that simple in the world of business.

At this point the offer had been formally accepted by the Twitter shareholders. Backing out at that point isn’t possible unless something material to the deal had been discovered during the due diligence process.

In Musk’s view, it had. In Twitter’s view, it hadn’t. As is so often the case in corporate America, the question ended up in a courtroom.

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Discovery process reveals insight into billionaire thinking

Casual observers have been given some fascinating insights into the behind the scenes workings of the billionaire club. As part of the discovery process for the lawsuit, a number of text exchanges between Musk, Twitter and Square (now Block) founder Jack Dorsey and Twitter CEO Parag Agrawal and a number of influential investors.

These conversations happened after Musk had amassed around 9% of Twitter stock. Rather than looking to take the company private from the beginning, he had initially planned to become a major shareholder and to join the board of directors.

Some of these were fairly tame, with the message between Musk and Dorsey sharing ideas for how Twitter could become an open source protocol (like email) rather than the closed system funded by advertising that it is now.

The discussion with Parag Agrawal was less polite. After some initial friendly back and forth, the conversation turned sour when Musk published a tweet asking his followers “Is Twitter dying?”

Agrawal was quick to remind Musk that stirring up this message was not helpful for Twitter and was counterproductive to the growth of the company. Musk responded in blunt fashion, asking Agrawal “What did you get done this week?” and saying that “I’m not joining the board. This is a waste of time. Will make an offer to take Twitter private.”

What happens now the deal is back on

Elon Musk’s lawyers’ submission to the court simply stated that “The Musk parties intend to proceed with the closing of the transaction.” This was made under the conditions that the trial in Delaware be adjourned and that the financing could still be arranged.

This doesn’t mean that Twitter will have a new owner tomorrow. The full process is still likely to take many months before it is officially completed and shareholders are going to have to wait a while longer to get their hands on the proceeds.

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What happens once the deal is complete remains up in the air.

Musk tweeted on Tuesday that “Buying Twitter is an accelerant to creating X, the everything app.” Which begs the question, what is the everything app?

So far we don’t know much, much Musk has touched on this briefly in the past. The vision appears to be an all-in-one app that includes social media, payment services, food delivery, text messaging, gaming and video conferencing.

There’s no real equivalent in the US, but Asian examples like WeChat in China, Grab in Singapore and PayTM in India show that the demand is there if the product is right.

It’s an ambitious plan and if he does plan to follow through, it’s also likely to be a very expensive one. With this in mind it makes sense to undertake such a significant pivot as a private company.

That way, the transformation can be undertaken without needing to keep shareholders happy with profit growth on a quarterly basis. One of the main benefits of private ownership is that a more long term view can be taken.

What does this mean for investors?

If all goes according to plan, pretty soon investors won’t be able to buy stock in Twitter. That’s a big player in the tech space taken off the market, but there are still many others available for investors to choose from.

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Source: Forbes

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