A Quick Rundown Of The Elon Musk/Twitter Saga

Elon Musk just formally submitted an offer to buy Twitter. And people either really care (for or against) or think the entire thing is just stupid.

I made an offer https://t.co/VvreuPMeLu

— Elon Musk (@elonmusk) April 14, 2022

A lot of people aren’t on Twitter and therefore don’t understand or care about the whole Elon Musk vs Twitter saga that’s been unfolding this week. So I wanted to give a rundown of events for people who might be wondering.

People who aren’t on Twitter just don’t understand Twitter. It’s that simple. It’s probably a hard thing to hear because if you aren’t on Twitter, it seems like the whole thing is just stupid and not worth anyone’s time or effort. And I legitimately understand this perspective because I wasn’t on Twitter until relatively recently (the last year or two), and I thought Twitter was just stupid and useless. I couldn’t understand why people seemed to be so obsessed with it. But if I’m being completely honest, as much as I hate it and wish it wasn’t so, Twitter is probably the best social media “platform” (I use that word loosely, because platform/publisher/Sec. 230 is kind of the crux of the issue here) for people interested in fast and useable information and content. Yes, Facebook is huge, but its intended purpose is completely different. Thus it simply cannot be used the same way that Twitter can, on either the information dissemination side or the information collecting side. Despite some very serious issues that need to be corrected in order to improve overall user experience and safeguard free speech and the metaphorical “town square,” Twitter is the space where users can find the greatest amount of concise and easily-accessible content in an extremely user-friendly format. It’s extremely biased in terms of user politics, D+15 according to Pew research, which means it’s essentially a Democrat echo chamber, and that really is a huge issue that needs to be rectified. And for all the incredible efforts of other new, more conservative platforms created as an alternative, several of which I use, there just isn’t anything quite as great as the original, whether it’s due to format, usability, or simply the number of users on the platform. I’m sad about it and I really want an incredible alternative, but it’s true. So that’s the background you need to understand if you aren’t a Twitter user.

Elon has spoken publicly on the dangers of Big Tech censorship, especially regarding Twitter. He’s criticized the company’s obviously inconsistent enforcement of policies, as well as their obviously woke leftist agenda. He’s called for change on Twitter, which he believes is necessary to protect free speech in America. And Elon is a man of action, not just talk, so he put his money where his mouth is.

Last week, Elon purchased about 9% of Twitter’s total stock for about $3B, which made him the company’s single largest shareholder. It was then publicly announced by Twitter CEO Parag Agrawal, who recently replaced Jack Dorsey, that Elon would be offered a seat on the board of the company as a result of his significant acquisition. Twitter stock price jumped and Elon started talking about his plans for changing the platform. He took to Twitter asking users what kind of change they hoped to see once he was on the board. The top two user suggestions were an edit option and a comprehensive review and overhaul of censorship, including who does and does not get banned (American presidents and elected officials are banned while CCP and Kremlin officials have very active accounts), and what does and does not get labeled or removed. But then Parag released another public statement essentially explaining in very careful language that Elon had turned down the board seat because, once on the board, he would be considerably restricted in his public speech due to what would then be considered his fiduciary duty to shareholders as a board member. Additionally, his Twitter stock purchasing would be capped.

Elon had apparently realized that the whole reason he was doing this Twitter thing was to change the censorship of the platform and protect free speech. And he realized he couldn’t do so with his hands tied like that. So he turned down the board seat.

Today, he announced that he has officially submitted an offered to buy the entire company for cash, to the tune of about $41B, which is $54.20/share, significantly higher than its worth when Elon bought his 9%, and higher than its worth before he announced the offer this morning. He explains that this is not a threat, however he wants to be clear that if they reject his offer, he will have to “reconsider my position as a shareholder.” Essentially, he’s saying he might dump his stock. Flooding the market with 9% of a company’s stock would tank the value, which would have a massive impact on every person or fund that currently owns Twitter stock.

So now the question is, how does this play out considering the board’s fiduciary duty to its shareholders? The board has said they will consider Elon’s offer. Any guesses on what will really happen if the board declines his offer?