Elon Musk’s Struggle to Buy Twitter
January 20, 2023
In April, 2021, Elon Musk offered to buy Twitter for $44 billion dollars, shocking the internet and media alike[1]. However, he soon withdrew his bid to buy the company. Yet recently, Elon Musk has again offered to buy the company. What caused this dramatic shift?
Musk first began investing in the company in early January of 2022, becoming a key shareholder. Musk continued investing and hence, by March, he had become one of the company’s largest stake holders. As such, he was invited to join the board, prompting him to tweet about several proposed changes for the company. For example, he believed that Twitter was not upholding the principles of free speech, and therefore changes, such as repealing the ban on former president Trump’s account, needed to be instituted. [2]. However, as a member of the board, he would not have much freedom to make large scale decisions. Further, the invitation to the board had one condition: Musk was not allowed to own more than 14.9% of the company’s stock. At the time, he already owned 9% of shares, therefore limiting his growth. Moreover, as a board member, he would have to keep in mind the interests of all shareholders, not solely his own. Thus accepting the invitation may have resulted in financial loss for Musk, as well as limited his potential to execute plans.
By backing out of the deal, Musk had a greater freedom in buying and making changes. He soon again made clear his desire to buy the company, and threatened to take over the company aggressively. Twitter attempted to halt his purchase of the company by lowering Twitter’s shares for other shareholders, and thus making it more expensive for Musk to buy the company, yet this proved ineffective. After signing the agreement to acquire Twitter, however, Musk began voicing his numerous concerns. According to Musk, the platform had lied to him about the number of spam accounts and bots present on the site. Twitter, however, denied all accusations. [3]
Due to these accusations, Musk tried to back away from the deal. But because Musk had already signed the agreement and claimed that he would buy the company, Twitter filed a lawsuit against Musk, a court case which would have taken place on October 17th. Less than two weeks prior, Musk revoked his statement regarding his unwillingness to buy Twitter, likely in order to avoid the upcoming court case. [4]
All in all, Musk expressed his desire to buy Twitter, backtracked, and then wanted to buy Twitter once more – a ten month saga resulting in him obtaining the company.
