Chirp

Elon’s buying Twitter for $44B, and now the world’s richest man will own the world’s most influential platform

Tuesday, April 26, 2022 by Robinhood Snacks |
The bird app’s going private (Nikolas Kokovlis/NurPhoto via Getty Images)

The bird app’s going private (Nikolas Kokovlis/NurPhoto via Getty Images)

He really did it… Elon bought Twitter. Yesterday Twitter agreed to sell itself to Elon Musk for $44B after weeks of intrigue. A recap: three long weeks ago Elon outed himself as Twitter’s biggest shareholder and (briefly) joined its board. Then he tried to take over, prompting the board to use a poison pill to try to stop him. It didn’t work…

  • Money talks: Elon’s offer was 38% higher than Twitter’s pre-Musk value. So once Elon got $13B from Morgan Stanley and other banks, $12.5B from loans against Tesla stock, and put up the rest in cash, the board changed its tune.
  • It’s a pricey purchase, even for the world’s richest guy. Elon’s $21B personal investment is one-fifth of his net worth.
  • The deal, unanimously approved by Twitter’s board, is expected to close this year, pending regulatory approval.

The internet’s town square… is about to get Elon-ified. After loudly criticizing Twitter for suppressing free speech, he has hinted at making changes to the platform:

  • Fewer ads: Elon wants to reduce Twitter’s reliance on ads, which make up 90% of revenue, by prioritizing subscriptions.
  • Less moderation: He wants to change current moderation policies to promote free speech, which could frustrate advertisers.
  • Clearer algos: Elon plans to open-source Twitter’s algorithm to show users how posts reach their timelines and reduce bots.
THE TAKEAWAY

The Technoking is a famously hands-on tycoon… He’s less interested in reputation and more interested in influence. Twitter doesn’t have TikTok’s user base or The New York Times’ cachet, but it has outsized influence because it's used by everyone from US presidents to Kim K. So while some billionaires pay for prestige (see: Jeff Bezos buying The Washington Post), Elon pays for primacy: he wants to be at the center of the issues that interest him. First it was accelerating the green transition with Tesla, then colonizing other planets with SpaceX, then “solving” traffic with The Boring Company — and now “saving” free speech with Twitter.