The billionaire has an agreement to acquire the microblogging website Twitter.
Elon Musk hears criticism and never hesitates to respond to it.
Like a boxer taking the blows of his opponent in the first rounds of a boxing match, the billionaire tends to have phases of observation. He observes his opponents to try to find their weakness before striking the fatal blow.
The whimsical CEO of Tesla (TSLA) – Get Tesla Inc Report has made a takeover bid of $44 billion, or $54.20 per Twitter (TWTR) – Get Twitter, Inc. Report share, to buy the social network which he describes as the “de facto town square” of the internet.
Musk explains that his decision is motivated by the desire to restore the principles of free speech on the platform. The deal has alarmed Democrats who say they fear the world’s richest man will handle the platform to conservatives, and especially extremist and far right voices. They also say they fear an explosion of hate speech in the name of free speech.
New Funding?
Musk has so far said that his Twitter will tolerate comments that fall within the legal scope and respect current legislation in each country where the social network operates. Basically, as long as something doesn’t break the law, it will be accepted on Twitter.
The transaction also raises questions about its financing. The billionaire managed to secure $46.5 billion in loan from banks and margin loan guaranteed by his Tesla shares. And this part which represents $21 billion is the one on which all eyes are currently focused. Musk, who sold millions of Tesla shares for just over $8.5 billion, wants to reduce this cash contribution tied to his personal wealth, according to Reuters.
The new financing could come in the form of preferred or common equity. Musk is trying to convince certain major shareholders of Twitter, hedge funds and wealthy individuals to provide preferred equity financing for the acquisition.
The billionaire is also trying to convince some shareholders not to sell their shares as part of the offer but to remain shareholders of the group even when it will be delisted.
Jack Dorsey, the founder and former CEO of Twitter, is among the shareholders Musk reportedly told about his plans.
