In April, Elon Musk proposed buying Twitter for $54.20 a share. Twitter accepted the deal, sparking a months-long drama. Twitter employees quit because they didn’t want to work for the often-demanding Elon Musk, who also floated the idea of giving Donald Trump his Twitter account back. The media and Democrat politicians blasted the idea that Musk might control a major social media outlet – if one that’s riddled with bots and frequent crypto scams.
Then Elon Musk reversed course and decided that he didn’t want to take Twitter private after all. Some people may have breathed a sigh of relief even as Twitter took him to court in a bid to force him to make good on the $44 billion deal.
Now Elon Musk has reversed course again, saying that he will go through with it. Twitter shareholders already took a vote, overwhelmingly approving the deal amid the back-and-forth between Twitter’s legal team and Musk’s lawyers. Regulators tentatively okayed the deal. Now all that’s left is to close the deal. (Finally — maybe. If Musk doesn’t change his mind again.)
Musk’s change of tune caused enough price movements in Twitter’s stock (NYSE:TWTR) to force pauses in trading. On October 4 at 4:00 pm EST, it was trading at $43.01. Now it is trading at just above $51 as day traders try to get in on what could now be a lucrative deal.
Tesla’s stock (NASDAQ:TSLA) dropped a bit since the news broke, though not enough to justify the alarm sounded by some mainstream media outlets. Musk can take out a loan with his Tesla stock as collateral to fund the Twitter deal.
However, the deal doesn’t necessarily need to alarm investors very much now that Tesla opened two new Gigafactories this year. The new Gigafactories can help the company continue to set quarterly delivery records for its electric vehicles.
What does Musk plan to do with Twitter?
Musk may or may not give Donald Trump his Twitter account back, especially considering that Trump called him a “b-shit artist” in the wake of Musk initially trying to back out of the deal. Musk characteristically fired back, though maybe not as harshly as he has fired back at past critics:
Musk previously floated the idea of charging a small amount of Dogecoin per tweet. Dogecoin’s value jumped by a bit in the wake of the news that Musk reversed course again, though it is still nowhere near last year’s ATH.
He also suggested making changes to Twitter’s “blue check mark” verification system. He said he could add a different check mark to the Twitter members who pay the $2.99 per month subscription fee for the premium Twitter Blue. He suggested that it could cut down on the spambot problem that Twitter has.
Twitter got 90% of its revenue from advertising in 2021. Musk suggested that having Twitter depend on ads for revenue had its flaws: “The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.”
How to get around it though? The charge-per-Tweet model might have its benefits for bringing in some money besides making it more costly to run a bot account. At least one of his followers also suggested that an additional Twitter “marketplace” might be an option, though Musk seemed to have no comment on that.
Musk mostly seems interested in doing some housecleaning with Twitter, with getting rid of bots and alleged bias in its algorithms as priorities. He also suggested that Twitter could provide the name recognition for an “everything app” that he calls X. He mentioned that it could accelerate the development of X by 3 to 5 years.
Right now, there aren’t many details on what the “everything app” will look like. With Musk in charge, it might wind up looking like Twitter with more features. And fewer spambots.