As Twitter is set to become private under Elon Musk's majority ownership, questions are asked what Twitter will look like, and what changes he plans.
Tesla CEO Elon Musk, the world's richest person, has bought Twitter for USD 44 billion, or about Rs 3368 billion. Twitter's board has given the green signal to this deal. Elon Musk made a bid to buy Twitter two weeks ago. Mask says Twitter has 'tremendous potential' which he wants to unlock.
In making his 'best and final offer' to buy Twitter earlier in April, Elon Musk said he intended for it to reclaim its status as a 'platform for free speech around the globe'. The offer came after he criticised Twitter's censorship rules and the number of bots posting on the service.
According to Forbes Magazine, Musk is the richest person in the world. He is the owner of the electric vehicle maker Tesla. Along with this, he also runs the aerospace company Space X. As soon as he became the owner of Twitter, Elon Musk said that he will bring many changes in it. At the same time, he has said that he will also take strict action against fake accounts.
Elon Musk issued a statement after the deal was announced. "Free speech is the cornerstone of any democracy, and Twitter is the digital town square where important matters for the future of humanity are debated," he said.
Now that the deal has gone through, and ending its run as a public company since 2013, Twitter is set to become private under Elon Musk's majority ownership, questions are being raised over what Twitter will look like, and what changes he plans to push through.
Elon Musk started buying Twitter stock on January 31 and continued to buy shares during every trading session through April 1.
At the beginning of April, the SpaceX CEO became the largest shareholder in the firm with a 9.2% stake.
Twitter said Musk was joining the company's board of directors, causing Twitter's shares to rise over 7% in premarket trading.
Musk was invited to join Twitter's board but turned down the offer before launching a surprise bid for the company on April 14.
The billionaire businessman said he wanted to 'unlock' the social media platform's potential as a bastion of freedom of speech.
Twitter tried to fend off his bid, threatening to dilute the shareholdings of anyone who bought more than a 15% stake in the firm.
When Tesla CEO made a USD 43 billion unsolicited bid to take over Twitter, the social-media giant responded by adopting a 'poison pill' plan.
To ward off a takeover, the 'poison pill' plan would prevent Elon Musk from increasing his stake in Twitter beyond a limit of 15%.
However, the stance of the Board of Directors shifted after Elon Musk revealed more financial details about his proposed bid.
Elon Musk has secured USD 25.5 billion of financing for the deal and will take a USD 21 billion stake in the business.
The Twitter board unanimously approved the bid, which will now be presented to shareholders for a vote.
Billionaire Elon Musk said he has secured USD 46.5 billion in debt and equity financing to fund his bid to buy Twitter Inc, according to a regulatory filing.
The world's richest person said he had lined up USD 25.5 billion in debt financing from investment banks such as Morgan Stanley, Barclays and Bank of America among others.
The remaining USD 21 billion of the money will be funded by him through equity commitments, a filing to the US Securities and Exchange Commission showed Thursday.
Musk arranged funds from reputed Wall Street banks, with majority from his deal adviser Morgan Stanley, as well as a clutch of banks, Twitter board could not ignore his offer.
Elon Musk has about 75 days to execute a deal for the USD 13 billion debt commitment he has secured from banks.
The offer would have expired if an acquisition agreement wouldn't have been executed by July 4, according to a Bloomberg report. Though there is a clause to extend it.
For the bridge loan commitments, amounting to USD 12.5 billion, Elon Musk has a condition to satisfy, that is to secure a maximum loan to value ratio of 20%.
This is expected to be satisfied by the billionaire businessman by contributing some Tesla shares to the borrower, the Bloomberg report added.
Elon Musk further said in the statement, "I will make Twitter better than before. New features will be brought in it. This will increase the confidence of the people. Twitter has tremendous potential. I look forward to working with the company and users to unlock it."
Let us tell you that Elon Musk himself has not stayed away from controversies on Twitter. He has around 83.8 million followers. In the year 2018, the US financial regulator accused him of misleading Tesla investors with his tweets. Musk constantly keeps his words on Twitter. "I hope even my worst critics stay on Twitter, because that's what freedom of expression means," he wrote hours before the deal was announced.
Twitter's core business model is ad-based and Elon Musk wants to change that. According to the BBC, he claims that he is more interested in membership. That is, he wants people to be charged for using Twitter. But this will not be easy in the current environment, where all major social networks are free-to-use.
It has to be seen whether Twitter users are ready for this or not. Musk also likes crypto-currencies. Can they use the platform to encourage payments in volatile, unsecured currencies like bitcoin?