Will Elon Musk buy Twitter ?

In 2017 Elon Musk wrote "how much ?" on Twitter in response to a tweet from one of his followers suggesting him to buy the platform. This sentence, considered as a humorous line, was quickly forgotten by the media. However, it came back to the forefront when the billionaire recently announced that he wanted to acquire Twitter. Although unexpected, this acquisition did not raise any specific issues, until it turned into a real financial soap opera in just a few days, which is not ready to end.

Summary of Elon Musk’s attempt to buy Twitter

Elon Musk, who describes himself as a defender of freedom of expression, has repeatedly criticized Twitter. According to him, the platform does not always respect freedom of expression, a value he considers crucial in a democracy. In order to fight against this, he decided to buy the company.

Musk started buying back shares as early as January 2022. He announced on March 14 that he owns 9.1 percent of Twitter's shares, making him the company's largest shareholder. Given the number of shares he owned and his experience in corporate management, the Twitter board of directors proposed Elon Musk to join them on April 5. He accepted.

However, the billionaire finally changed his mind a few days later. Indeed, agreeing to join the board of directors would have prevented him from holding more than a certain portion of the company's capital. In this case, he could not have been a member of the board and held more than 14.9% of the capital.

Eager to acquire the entire company, Elon Musk made a buyout offer on April 14 for $43 billion, or $54.20 per share. Considered as an hostile takeover attempt, Twitter decided to defend itself using the defensive tactic of the poison pill, before finally publicly accepting the buyout on April 25.

However, on May 13, there was a new twist. Musk finally announced that he no longer wanted to buy the company.

According to him, the number of fake accounts, in other words the number of Twitter accounts that are held by robots, corresponds to about 30% of the active accounts on Twitter. This large number of fake accounts represents for the buyer a real source of nuisance for the financial development of the company. Twitter quickly responds by stating that only 5% of all active accounts on the network are accounts held by robots. Faced with this answer, Elon Musk retorts by considering that this is false and that all the information he received is not reliable. He therefore says that he can not buy Twitter in these conditions.

If the acquisition seemed to be definitively over, an umpteenth rebound came to punctuate the case. On July 12, Twitter, feeling aggrieved, announced to file a complaint against Elon Musk to force him to buy the company. Far from being over, the purchase of Twitter still raises many questions.

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Is Elon Musk's purchase of Twitter really motivated by the greater good ?

The reasons why Elon Musk wants to buy Twitter are not known today. He says he is looking for the common good through this social network. According to him, Twitter is the new public space of our society. This is why the platform must guarantee freedom of expression. This is not always the case for him, who considers that the censorship of many tweets deemed defamatory to certain people is an attack on freedom of expression.

The majority of financial analysts wonder about the real motivations of Tesla's CEO. In fact, according to them, the multiple retractions of Elon Musk and his progressive repurchase of company shares in parallel with the offers made publicly, are an attempt to try to lower the value of the company, and therefore to buy it at a lower cost. This may suggest that what matters to him is the financial performance of the company.

The potential financial interest of Elon Musk's takeover of Twitter ?

This may not be the reason why Elon Musk wants to buy the company, but we have to admit that it is real. With an increasing turnover, a ROA of 4.11% and a net margin of 8.76%, profitability indicators are globally positive, despite a potential decrease induced by the actions of the billionaire. The EBITDA has never stopped growing, and before Elon's interventions the forecasts were bullish for the next three years.

To sum up

The purchase of Twitter is far from over. If at the beginning this purchase had nothing unusual, it has gradually turned into a real duel between Elon Musk and Twitter. Today it is difficult to say what are the real intentions of the billionaire.