Elon Musk and Twitter, a takeover as political as it is economic

An offer at $54.20. This is the very serious amount at which Elon Musk offered to buy back shares of Twitter… But it is also a nod to cannabis, nicknamed “4/20” in American slang, in reference to the habit of smoking joints at 4:20 p.m. As often with the boss of Tesla and SpaceX, entrepreneurial flamboyance rubs shoulders with schoolboy provocation, with a consummate art of the opposite. The surprise takeover bid, launched on Thursday April 14 by the world’s richest man, plunged the business and media worlds – as well as Twitter – into a moment of surreal excitement. The hostile capitalistic maneuver gives rise to all the more conjecture in that it includes, in addition to its economic aspect, an important political dimension.

Twitter “will not prosper or fulfill its societal mission [de liberté d’expression] in its current form, Mr. Musk explained in a letter to the board. Before throwing, with his usual aplomb: “Twitter has enormous potential. I will make it happen. »

The price proposed by Elon Musk in his takeover bid values ​​the company in which he already owns 9% of the capital at 46 billion dollars (42.3 billion euros). The buyer is therefore ready to pay a “premium”, that is to say a bonus of 21% compared to the opening price of the security on Thursday, and 54% compared to that of January 28, the date at which he discreetly began to invest in Twitter, until becoming its first shareholder.

This quiet raid was revealed on April 4 in documents from the Securities and Exchange Commission (SEC), the American stock market “policeman”. Taken by surprise, the leaders of Twitter then proposed to the new shareholder to enter the board of directors, before the interested party refused, on April 11, on the occasion of a new twist. It was in fact probably a tactic to have a freer legal hands.

“I don’t play the classic back and forth game,” preferring “go straight to the point”, Elon Musk explains today to the board of directors, in his missive announcing his unfriendly takeover. In the process, the social network announced that it was going “examine carefully” the offer.

Read also: Elon Musk becomes Twitter’s largest shareholder

A social network still in deficit

Twitter is, much more than the other social networks, an attainable target, because it is in a much more precarious economic situation than Facebook (2.9 billion users), YouTube (Alphabet-Google group, 2 billion users) or TikTok (1 billion users). Its revenue was $5 billion in 2021, representing an online advertising market share of around 1%, according to Insider Intelligence. Despite nearly 220 million daily active users, the company has never found real financial stability, and is still not profitable. Its growth has slowed in recent months, and its business model, based almost exclusively on advertising, has been affected by the crisis linked to the Covid-19 pandemic. In 2021, despite a 37% increase in turnover, the company still lost $221 million.

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