On January 31, 2022, Elon Musk started increasing his stake in Twitter, his stakes increased by five percent. This was the beginning of Elon Musk slowly taking over Twitter. On 4th April he disclosed that he now holds 9% stakes in Twitter.
He purchased stakes on March 14th, Musk has been one of the highest-profile users of Twitter, and the news of him owning 9.2 percent of Twitter came as a big surprise to many users (1).
Musk has been quite vocal about his criticism of Twitter, he recently announced a poll for his 80 million followers on Twitter about the issues of free speech. He publicly called out Twitter and questioned its approach to free speech. He conducted a poll on March 25th asking his follower if they believe that Twitter adheres to the principle of free speech.
He also followed this tweet with another tweet stating that the consequences of this poll would be very important. He even went on to ask if a new platform would be needed (2). Combining this statement with the fact that he was now the owner of 9.2 percent of Twitter implied that he might be planning a takeover.
Musk has publicly announced his intention of taking over Twitter, this was considered to be one of the biggest tech news of the year. Musk offered $44 billion to Twitter in order to buy the platform, till then he had already bought about a 9.2% stake in the company. He was then offered a seat but he declined (3).
The CEO of Twitter Parag Agrawal previously announced that Elon Musk will be appointed to the board after his purchase of 9.2 % of the company share. On the same day, Elon Musk shared that he would not be joining the board, He expressed that not joining the board would be the best.
What happened afterward was a complete disaster, Twitter started a poison pill to stop Musk from taking over the company. Musk made his intention clear by offering $44 billion, which was later accepted by the company, despite all the controversies that came out surrounding this news.
Some were against Musk’s takeover, while others were expecting Musk to completely revolutionize Twitter.
Amidst all these the co-founder of the company announced he would not be coming back as a CEO after the takeover. In the month of May musk announced that the deal is on hold (4) because of the issues of fake accounts, but he still reassured people that he is still committed to this deal.
On 8th July came the news that Elon Musk has decided against the deal. Musk called off the deal, he will not be buying Twitter, the reason he gave for backing out was that Twitter failed to live up to the contractual obligation. Musk calling off the deal has now led to Twitter possibly entering into a legal battle with Musk.
Now let us look at the whole timeline of events of Musk’s acquisition of Twitter and then calling off the deal.
January 31, 2022
Musk slowly started acquiring Twitter shares. Musk had slowly started buying shares of Twitter but he was very quiet about his acquisitions.
March 14, 2022
On March 14, Musk managed to increase his shares by 5%, therefore Musk was supposed to disclose his purchases. The investors who purchase 5% or more are obliged to disclose their purchase. This would enable the investors to understand what is affecting the share prices.
Musk was supposed to disclose the purchase within 10 days (5), which he failed to do. He waited for about 21 days before making a disclosure. By then he had already acquired 9.6% of twitters shares. The announcement of his acquisition sent the twitter stocks soaring. Had he disclosed his purchases before, he would have to spend more money buying more stocks, he saved about $143 million.
By buying 9.2% of twitter’s stock musk became the largest shareholder of the company(6). People started anticipating that Musk plans to change Twitter’s operations, and Musk did not disappoint, he started highlighting many issues that Twitter has.
March 24, 2022
In a series of tweets, Elon Musk criticized Twitter for not adhering to free speech. He started polls asking his followers if they agree that Twitter should be open source. At this time his stakes were still secret. In a tweet, he expressed how he is worried that the “de facto bias in the Twitter algorithm has a major effect on the public.
March 25, 2022
Continuing his criticism of the platform he asked his followers through a poll if they believe Twitter is adhering to the principle of free speech. By free speech he clarified he means he is against censorship and therefore he implies ‘free speech” means which matches the law.
Many expressed that Twitter has already been fighting for free speech on its platform (7)
It was also pointed out that being a private company Twitter has no obligation to the First Amendment (8). It could only be applied to federal and state government, further applying ‘free speech’ as Musk call it might lead to the explosion of hate speech, misinformation, etc.
Although many expressed that they agree with Musk (9), we can’t deny the fact that the First Amendment is highly permissive, which would promote content like racism and doxing.
March 26, 2022
Musk started teasing the thought of the need for a new platform. People believed musk was contemplating starting his own social media platform, after all the issues he very publicly pointed out on Twitter.
Some users even suggested buying twitter instead, and very soon the news revealed that Elon Musk has already been acquiring twitters stock for the past few months. He reached out to Jack Dorsey the co-founder and former CEO of Twitter, and they both discussed the future direction of social media.
April 3, 2022
Twitter’s board meeting to discuss the possibility of offering Musk a seat on the board. The Board intended to make Musk agree to the standstill provision, so as to limit Musk's public statements regarding the company. These statements also included his unsolicited public proposals regarding the acquisition of the company without taking consent from the company (10).
April 4, 2022
On 4th April it was revealed that Musk has now become the largest shareholder of Twitter. He owned a 9% stake in the company, this news led to the Twitter shares soaring. Musk’s previous tweets started making sense, he had been openly criticizing twitter, making the users believe that Musk plans to bring changes and take on a much more active role in the operation of the social media platform (11).
April 5, 2022
The CEO of Twitter Parag Agrawal announced that Elon Musk will be joining the Board of Twitter. IN reply to Parag Agrawal’s tweet musk said he looks forward to working with them. CEO Agrawal revealed that he anticipates working with Musk and believes he would bring great value to the company.
By agreeing to join the board Musk cannot acquire any more than 14.9% of twitter’s stock as long as he is part of the board. The former CEO Jack Dorsey, who is a good friend of Musk expressed how he always wanted Musk on board.
By becoming a member of the board Musk would not be able to become the beneficial owner of more than 14.9% shares of Twitter (12).
April 9, 2022
Musk called out Twitter users and celebrities like Justin Bieber, Taylor Swift, Barak Obama, etc, who despite having a large number of followers very rarely posted. He asked in a tweet whether social media network was dying. (t)
April 10, 2022
Musk revealed his intention of not joining twitter’s board in less than a week, this news was declared by twitter’s CEO Parag Agarwal. On April 9, Musk informed Twitter that he would not be joining the board without giving any solid reason. By doing so he would no longer be bound, he continued to criticize the platform.
He deleted two tweets on the weekend, both of which suggested how he want to change Twitter in the future. He asked his followers whether they would like to change the San Francisco headquarter of Twitter to a homeless shelter.
In the other tweet, he suggested that the Twitter Blue subscribers “should be allowed to pay with dogecoin, get an authentication checkmark and keep the offering free of advertisement” (13).
April 11, 2022
By filing an amended disclosure with the SEC, Musk ensured that he would be able to purchase as many shares as he wants(14)
April 14, 2022
In April Musk sent the whole world into a frenzy by making an offer of $41.4 billion to acquire all shares of Twitter. Elon musk was trending because of this offer, he was ready to offer $54.20 per share all cash.
April 15, 2022
Twitter in opposition to musk’s offer decided to implement the poison-pill provision (15) if necessary. In an attempt to thwart Musk's advances Twitter deiced to use a poison pill, a financial device, that can be used by the corporate board to flood the market with so many newly created stocks to make the takeover expensive.
Musk reacted by stating that if Twitter takes such action then it would be breaching its fiduciary duty.
April 16, 2022
Musk revealed that Twitter’s board owns almost no shares after the departure of Jack Dorsey, therefore the economic interests of the board are not aligned with the shareholders.
April 19, 2022
It was reported by New York Post that Musk might be willing to invest about $ 15 billion of his own money into the acquisition. He will be borrowing against his Twitter stakes to be able to push through the acquisition(16).
April 21, 2022
Musk reveals that he has secured $46.5 billion for the deal, “including two debt commitments from Morgan Stanley and other unnamed financial institutions and one equity commitment letter from himself” (17).
Musk declared that even a week after his offer, he has yet to receive a response from Twitter, he is ready to negotiate the acquisition and is very well prepared.
Musk said this was his “best and final” offer!
April 24, 2022
The Twitter board held a meeting to discuss Musk’s proposition. They started taking his offer seriously, but the issue that whether Musk would sell his stake in Tesla to acquire Twitter was yet to be seen.
April 25, 2022
Twitter declared they have seriously considered Musk’s offer and are in agreement to sell it to him for $44 billion. Musk was delighted and described his offer to be for a better future (18). On the same day, the Twitter employee started questioning what it would mean for them and if the Former president of the US Donald Trump would be allowed back on the platform.
Twitter decide to accept the deal and negotiated with Musk about the terms of the agreement. According to these Musk was obligated to complete the purchase on the agreed-upon terms, and if he fails to do so he would have to pay an amount of $1 billion in order to get out of the deal.
The agreement also limited his public statement, therefore he cannot disparage the company or the official while the deal is still closing.
April 29, 2022
Musk sold about $8.5 billion(19) of his own Tesla stock, which was revealed through the filing. The reason was yet to be disclosed but people could already deduce that Elon Musk was raising funds to complete his acquisition. Twitter agreed to sell all the shares for the price of $883.09 per share.
May 4, 2022
Musk managed to raise $ 7 billion with new investors including the founder of Oracle Larry Ellison, Binance, and Sequoia Capital (21).
May 6, 2022
Musk revealed that he intends to increase Twitter's annual revenue to $26.4 billion (22), he would achieve this by bolstering twitter’s subscription revenue. He plans to decrease Twitter's reliance on adverts and build a payment business. He plans to achieve the said revenue by 2028.
May 10, 2022
Musk declared that he would be reinstating Trump’s account (23), and the ban would be removed after his acquisition has been complete.
May 12, 2022
CNN business revealed after confirmation with Twitter that they have put a pause on most of the hiring processes. They are also pilling back on non-labor costs, and Kayvon Beykpour and Bruce Flack, the General manager of consumer, and the revenue product lead respectively, would be leaving the company.
May 13, 2022
Musk announced through a tweet that the deal is on hold (24) because of issues of fake accounts and spam on Twitter. But legally he cannot put the deal on hold, and later that day both agreed on the terms and publicly announced it.
Musk stated that about 5% of users are fake, this news plummeted Twitter’s share by 10% in the open market. He later tweeted that he is still committed to the deal. He also posted that his team would be testing twitter’s numbers.
May 14, 2022
Musk came under fire by the Twitter legal team because apparently, he broke NDA by revealing the platform’s sample size for automated user checks. Musk retorted by tweeting about it publicly.
May 16, 2022
The confrontation continued with Musk and CEO Agarwal exchanging tweets over the issue. CEO Agarwal tried to explain how Twitter combats spam accounts, to which Musk replied with a poop emoji (25).
May 17, 2022
Musk declared his acquisition will not move forward (25) unless he gets more information about the prevalence of spam accounts, with a tweet he declared that about 20% of twitters account are fake, which is misleading.
This was followed by another poll by Musk about twitters claim of more than 95% of accounts were real, he even called out SEC to evaluate the platform.
While Musk has pulled hold on the deal, Twitter has declared its intention to complete the transaction no matter what.
June 6, 2022
Musk wrote a letter to the legal head of Twitter threatening to walk away from the deal because Twitter is resisting his information rights, which were clearly outlined in the deal. His attorney accused twitter of breaching the merger, and not providing the data, therefore Musk has the right to move on from the deal.
July 8, 2022
It was declared that the deal has been officially called off (26) by Musk since twitter failed to provide Musk with the data he had asked for to evaluate the number of fake accounts on Twitter. Musk has been asking for the information for two months, and since his demands have not been met, he had the right to terminate the deal.
Twitter on the other hand is committed to the deal, wishing to complete the transaction with the agreed-upon price. They planned to “pursue legal action to enforce merger agreement”.