So what are the chances that Elon Musk actually ends up owning Twitter, and taking the platform private?
Well, it’s not looking great for Tesla Social ™ supporters, at least in this form.
Following Musk’s $54.20 per share buyout offer, and his various and ongoing criticisms of Twitter management, analysts have been trying to gauge the potential of a Twitter sale, with some private equity firms now looking to get in on the action, and either support rival bids for the company, or to partner with Musk in his buyout plans.
The basic premise is that Twitter is underachieving – while Meta has gone on to become a global behemoth, raking in hundreds of billions of dollars in revenue, Twitter, once considered a rival for Facebook, has failed to capitalize on its potential.
That may or may not be true, though there is some fairly strong evidence to support the suggestion that Twitter’s mismanagement, and lack of clear direction, has impeded its progress. From a business perspective, that spells opportunity – so while Elon is aiming to convert Twitter into the platform of free speech, by taking it private, and reducing its reliance on ads (thus enabling it to detach itself from censorship concerns), private equity firms smell cash, and the opportunity to make money on the back of Musk’s takeover push.
Indeed, according to reports, several PE firms, including Thoma Bravo and Morgan Stanley, have contacted Twitter’s board about possible alternative avenues to sale.
As reported by the Wall Street Journal:
“Apollo, one of the world’s largest buyout firms, has held discussions about backing a possible deal for Twitter and could provide Mr. Musk or another bidder like private-equity firm Thoma Bravo LP with equity or debt to support an offer, the people said.”
So while Twitter is expected to reject Musk’s takeover offer within days (speculation is that Twitter could announce its decision as part of its Q1 earnings report on April 28th), Musk’s takeover bid has opened the door for others, which could see an alternative, and more attractive bid arise, which may still see Twitter sold into new ownership.
At the same time, Musk has continued to criticize Twitter management, and the process which enables Twitter’s board to assess and decide on his bid, not Twitter shareholders, who Musk clearly suspects may be more enticed by his offer.
One way around this could be a tender offer, which Musk seemingly alluded to in a recent tweet:
In that process, Twitter shareholders would have the option to tender their shares at his offer price, which would enable Musk to theoretically win the platform via shareholder approval, side-stepping the board.
It’s a more complex route, and would require majority shareholder support for Musk’s offer (which is also, seemingly, not going happen). But it could provide another way for Musk to take over the platform, and convert into his vision for a free speech haven, however that might look.
But on balance, the odds would be against that actually happening, and with Twitter seemingly set to also rebuff Musk’s offer, the most likely outcome, at least at this stage, is that Twitter will shrug off Musk’s takeover attempt, then try to move on in the wake of its latest controversy.
What Musk does then is unclear.
Will he try to start his own social media platform anyway (ala Trump)? Will he look to partner with somebody else to put together a bigger offer? Will he just shut his Twitter account down, and move over to BeReal instead?
I do suspect that Musk overrates his popularity and magnetism, and as such, I could see him jumping to another platform, and expecting his 84 million+ followers to come along for the next chapter in his social media journey.
I doubt, however, that many would actually bother.
But there is another option which would definitely spark interest, even if it might be entirely unfeasible.
In recent days, Twitter’s former CEO Jack Dorsey has been actively criticising his former company, and its board, in a series of tweet replies.
True. And I really hope it stays that way. I do believe we have regressed recently tho.
— jack⚡️ (@jack) April 16, 2022
Dorsey has as much experience in the social media space as anyone, and he has strong views on the good and bad decisions that Twitter has made over time, while he’s also been a vocal supporter of Elon Musk and his future vision.
Maybe Musk and Dorsey should partner up on an entirely new platform, similar to Twitter, but without the issues that have impeded the app’s progress?
To be clear, neither Dorsey nor Musk have suggested anything along these lines, but it could be another avenue to consider, with the experience and backing to potentially give it a fighting chance.
But right now, as everything stands, it doesn’t look like we’re going to see Musk taking over Twitter – though as the past few weeks have shown, anything is still possible in this space.