Is Elon Musk’s Twitter interest still capitalism?

On Thursday, April 21, Elon Musk, who has over 82 million followers on Twitter, said he has gotten $46.5 billion in debt and equity financing to buy Twitter Inc. (TWTR.N) and is considering taking his offer directly to shareholders, a filing with U.S. regulators showed.

Musk himself is putting up $33.5 billion, which will include $21 billion of equity and $12.5 billion of margin loans against some of his Tesla Inc. (TSLA.O) shares to finance the transaction.

On April 14, Musk, the richest person on earth, as reported by Forbes, presented a cash offer of $43 billion to Twitter’s board of directors, saying the social media company needs to be taken private to grow and be more serious with free speech.

Twitter adopted a ‘poison pill’ on Friday, April 15, to limit Elon Musk’s ability to raise his stake in the social media platform, as a buyout firm, Thoma Bravo, emerged to challenge his $43 billion bid for the company.

Thoma Bravo, a technology-focused private equity firm that had more than $103 billion in assets under management as of the end of December, informed Twitter that it is exploring the possibility of putting together a bid, Reuters reports.

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Acting on that, Twitter said Friday, it adopted a poison pill that will stop anyone trying to amass shares of more than 15%. Known formally as a shareholder rights plan, the poison pill will be in place for 364 days.

The poison pill cannot stop Musk from taking his offer directly to shareholders by launching a tender offer. A tender offer would allow them register their support or disapproval of Musk’s offer.

Musk’s shares in Twitter Inc. is currently 9.2%, making him the second-largest shareholder, after The Vanguard Group with 82.4 million Twitter shares representing 10.3% of shares outstanding as of March 31, 2022.

Musk’s offer to buy 100% of Twitter Inc.

I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk wrote in a letter sent to Twitter Chairman Bret Taylor.

Elon Musk offered to buy Twitter Inc. for $54.20 a share in a filing, saying the social media company needs to be transformed privately, a little over a week after revealing a 9.1% stake in the company. Musk’s offer values Twitter at about $43 billion.

According to Musk, the social media company needs to go private because it can “neither thrive nor serve” free speech in its current state.

As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced,” he wrote. “My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.”

He claimed later during a talk at TED2022 that he isn’t interested in acquiring Twitter to make money off it and even said he’s not sure if he’ll even be able to buy the company.

This is not a way to sort of make money… it’s just that I think my strong, intuitive sense is that having a public platform that is maximally trusted and broadly inclusive, is extremely important to the future of civilisation,” Musk said at TED2022. “But yeah, I don’t care about the economics at all.”

An article in The Conversation, argues against Musk’s free speech plan saying, “what Musk is proposing would likely make speech on Twitter less free than it is now because people who cannot rely on social media platforms to protect them from online harassment tend to leave the platform when the consequences of online harassment become psychologically or socially destructive.”

In a tweet today, he says, “If our Twitter bid succeeds, we will defeat the spam bots or die trying! And authenticate all real humans.”

Is there a problem?

Elon Musk is the richest person on earth, now worth over $264 billion and may be the only super-rich individual who can pull such a stunt.

In 2002, Elon Musk got $176 million when PayPal sold to eBay,” writes Nicholas Colas, co-founder of DataTrek Research. “He reinvested much of that into Tesla, SpaceX, and other startups.”

The entrepreneur, in 20 years, has quadrupled that chunk of change almost 400 times—a near-unimaginable 1,557 times, which works out to an average annual return of about 42%.

He is “the man who has got the most of what men most want”. He continues to invest in what many people want and even argues that Tesla is many companies in one.

Earning 42% a year on his investments, the 50-year-old Musk is about four years from being a trillionaire.

The second-richest man, Jeff Bezos, owner of Amazon, is not close enough to want to beat him, and this gets everyone every time they think of it.

But, he is doing the work and has created over five amazing people-oriented solutions valued at billions of dollars, and the results are there.

So, if capitalism allowed him, why not?

Only moralists will say no to one man owning such an amount of money.

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