All about the purchase of Twitter by Elon Musk

2 min. reading
Digital economy, Digitalisation, Social Media / 13 June, 2022

Karla García Gil Journalist

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One of the most outstanding news so far in this young 2022 is the purchase of Twitter by the entrepreneur and CEO of Tesla, Elon Musk. The platform currently has 217 million active users.

However, the tycoon caused controversy when he announced last Friday, May 13, that he is putting the agreement on the acquisition of the platform on hold, to later affirm that he is still interested in the transaction.

Market reactions were swift and Twitter shares plummeted around 25% before the opening of the session, i.e. less than $35, i.e. $19 less than what Musk offered per share.

By the end of the day, the communications company’s shares ended with a 9.7% drop, while those of the vehicle manufacturer rose 5.7%, closing the week with a drop of 11.1 percent.

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The excuse

The pretext for dropping its offering was that, last May 2, Twitter estimated that fake accounts accounted for less than 5 percent of its active users during the first quarter of the year. However, it also warned that such figures are based on estimates and could vary, to which the Tesla owner responded that he does not trust the calculations and expects hard details to back up that information.

If he opts to decline the purchase agreement, it would be enough for the tycoon to pay only $1 billion. However, such a deal has led Elon Musk to compromise the investment in Tesla, which makes him the richest man in the world.

According to documents filed with the U.S. Securities and Exchange Commission (SEC), the entrepreneur sold around 9.6 million Tesla shares, worth around $8.4 billion, in order to consolidate financing for his Twitter takeover bid.

On April 25, the platform’s board of directors accepted the offer of $54.20 per share, or $44 billion to take full control of the company.

Twitter is a social network with a wider reach than even Facebook, as many people follow what happens there, whether or not they have their own account on the platform, unlike what happens on other networks, where it is necessary to register to see the content.

According to Statista data, in countries such as India, 47% of those surveyed say they use this platform regularly. This is followed by Mexico with 46%, while in Spain four out of every ten respondents consult Twitter to find out the latest news.

The Twitter-Musk agreement has sent shivers down the spines of the markets, who are waiting expectantly for the outcome of the story, which could even end in a lawsuit by either of the two parties.

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