- In April 2022, Elon Musk proposed buying Twitter for approx. US$ 44 billion.
- Musk backed out from the deal, alleging that Twitter is not sharing the details of the spam bots.
- As of October 4, 2022, Musk agreed to go ahead with the Twitter buyout deal.
Tesla CEO Elon Musk's association with Twitter has been around the corner for quite some time. Twitter CEO Parag Agrawal welcomed Musk to join the company board, but Musk turned down the offer five days after the announcement.
This all started in April 2022, when Elon Musk proposed to buy a hundred per cent stake in Twitter for approximately US$ 44 billion, which is around US$ 54.20 per share. Since then, many changes have happened with the Musk-Twitter deal.
Post this association, Musk tried to dismiss the deal by citing the reason for Twitter's lack of transparency. He alleged that the micro-blogging website is not revealing information and sharing details about the number of spam bots on its platform.
Interestingly, when the deal was announced, Musk was also named as one of the board members of Twitter on its investor relations website. There was also a question-and-answer session of the employees lined up with Elon Musk post his joining news.
But the session stood cancelled as Parag Agrawal announced the backout by Musk. He stated that Musk would not be a part of Twitter anymore.
The news broke out after several days of Musk's publicised welcome on Twitter. Although the exact reasons were not revealed, Agrawal stated that Musk would remain the biggest shareholder and that Twitter is open to his input.
How has Twitter performed?
As the reports on the deal spiked on, trading in shares of Twitter was halted. But as of October 4, 2022, the stock price for Twitter was US$ 52 apiece and witnessed an increase of 22.23 per cent within one day.
In Q2 2022, Twitter’s revenue was US$ 1.18 billion, down by one per cent year-over-year (YoY). Meanwhile, the company’s operating loss was US$ 344 million, and its net loss was US$ 270 million.
The net cash provided by operating activities in the same quarter was US$ 30 million compared to US$ 382 million in Q2 2021.
As of October 4, 2022, Musk agreed to go ahead with the Twitter buyout deal at the original quoted price. This decision came post several months of trying to nullify the deal from Musk's side.
A letter was addressed to Twitter by the legal team Musk stating the changes he would like to implement for Twitter. The top priority is to eliminate the current spam and spam bots on the platform.
Further, Musk wants to improve the user experience for Twitter by making it more transparent and open-sourcing the Twitter algorithm.
However, the two parties are still scheduled for a trial in Delaware on October 17 regarding Musk's earlier attempts to terminate the agreement,
The transaction will likely go through as long as Musk secures the promised loan funding and the Delaware Chancery Court dismisses Twitter's case against him. But unless it can establish that the contract is genuine this time and not just a ploy, Twitter is unlikely to give up on its legal actions.
Since April, it has been a roller coaster ride and has witnessed several changes in the deal.