Elon Musk Buying Twitter?
by Joe Panettieri • Apr 14, 2022
Elon Musk has launched a hostile bid to buy Twitter for roughly $43 billion — or $54.20 per share in cash, Bloomberg News reported.
The offer price is somewhat modest and not a slam-dunk that it gets done, since it’s only a 13 percent premium to Twitter’s stock price as of April 13, 2022, Bloomberg Radio initially reported. A separate guest on Bloomberg Radio countered that perspective, and said Twitter’s back is to the wall and the board will likely need to accept the offer — though the social media network will likely scour the world for alternative offers, the report noted.
“It’s just a matter of time before Elon Musk owns Twitter,” Wedbush Securities predicted on Bloomberg Radio.
Elon Musk and Twitter: Edit Button, User Monetization & Social Monitoring Overhaul?
There are multiple ways to value the offer. SeekingAlpha says it represents an 18% premium (not 13%) premium over Twitter’s closing price yesterday. Also, Musk said the offer is a 54% premium over the day before he began investing in the social media company, SeekingAlpha reported.
Musk, already CEO of Tesla and SpaceX, essentially sees Twitter as a social media town square that needs to better monetize its user base, guests on Bloomberg Radio asserted. For starters, Musk wants Twitter to have an “edit button” capability. He also takes issue with the way Twitter censors content and polices users on the social network.
If Musk acquires Twitter, the deal could represent an inflection point for social media networks — many of which are under fire for how they manage, monitor, sort, promote and monetize user-generated content.
Twitter: CEO Change, Operating Loss
On the business front, Twitter has not kept pace with rival social media platforms in terms of growth and monetization strategies. Amid that reality, Parag Agrawal succeeded Jack Dorsey as CEO in November 2021.
Despite the business turbulence, Twitter has been growing. The social media’s network’s revenue was $5.08 billion in 2021, up 37 percent from 2020. But the company also had an operating loss in 2021 of $493 million — or an operating margin of -10%.