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Read MoreThe takeover of Twitter by Elon Musk
Twitter is a microblogging website and mobile application, where users can exchange messages of up to 280 characters. It is based on a follow/follow system and was initially created to tell the story of one’s life in the simplest and most direct way possible. Twitter was launched on March 21, 2006 and has been growing in popularity year after year, but it has recently made the headlines worldwide. Indeed, on October 27, 2022, Elon Musk, owner of Tesla among others, confirmed his takeover of Twitter Inc. which he had accepted on April 25, 2022 for the sum of 44 billion dollars after long and winding negotiations. Let’s take a look back at the biggest deal in the business world of 2022.
The Story of a Tumultuous Buyout
On April 4, 2022, we hear that Elon Musk has bought 9.2% of Twitter shares. The share price immediately jumped by +25%. On April 11, Elon Musk announced that he would not be a member of the board of directors for Twitter. What was the reason? A seat on the board would prohibit him to acquire more than 14.9% of the shares. On the other hand, he does not communicate on the reasons of his refusal, and we do not suspect yet a project of total buyout. It is only 3 days later, on April 14th, that he officially announced his intentions to buy the social network Twitter, in that he wanted to guarantee a safe framework and to promote freedom of expression for what he defines as “THE public place”. Very quickly, Elon Musk revealed his financing plan and Twitter accepted his offer on April 25, voted favourably by the board of directors. A smooth negotiation, which seemed to be settled quickly and in the proper way. It was not to be. On May 13, Elon Musk breaks the agreement previously established with Twitter Inc. The reason given was the amount of fake accounts on the platform: in the initial agreement, Twitter stated that less than 5% of active Twitter accounts were fake. Elon Musk contested this statement, suspended the buyout process and at the same time made the Twitter share fall by 20%. The legal battle was started.
Many Wall Street experts believe that this move aims to reduce the cost of Twitter’s purchase by making its stock value fall. At the same time, Elon Musk’s assets are not in good shape and the price of the car manufacturer Tesla fell by 29% during the month of May, which affects the personal fortune of Elon Musk to the amount of 250 billion dollars. After having publicly announced to renounce to the purchase of Twitter on July 8, Twitter will quickly take the law to force him to respect his commitment of 44 billion dollars. Finally, Elon Musk took control of Twitter on October 27 after completing the acquisition of the social network. “The bird is freed”.
Time for Major changes
Immediately after his arrival, Elon Musk took the decision to fire the former CEO of Twitter Parag Agrawal as well as its most senior executives. At the same time, no less than 50% of the total workforce of the social network will be fired and 4400 external providers will see their contract with the firm broken. Telecommuting is also prohibited for Twitter employees, as Elon Musk has always been against telecommuting as a general rule. Very quickly, a new authentication system is implemented, similar to the old “certified account” system but now open to everybody, to fight against bots and identity theft. This feature, called Twitter Blue, charged at 8 dollars per month, seems to be mainly a way for Twitter to generate regular revenue from its users. This announcement first created a wave of questioning among Twitter users, and many fears among public figures. These fears were quickly confirmed: a few hours after the deployment of the feature, many fake accounts of celebrities or big companies appeared on the platform. Here are some examples of the best …
Just after the launch of Twitter Blue, the service will be already suspended on November 11 following the number of problems that occurred and the complaints of victims of identity theft. However, according to Elon Musk, it will come back soon enough. Faced with the period of uncertainty that seems to reign on Twitter, many advertisers have decided to withdraw their ads from the platform, while waiting to observe the moderation that will be carried out and the measures taken under the direction of Elon Musk.
Elon Musk’s acquisition process has not been a smooth one. Between massive layoffs and an abundance of fake accounts that even disrupted the Wall Street markets, the whole spiced up by Elon Musk’s regular tweets, the platform seems to be taking an important turn and is about to make many changes. We expected nothing less from Elon Musk. Twitter being one of the most popular social networks in the world, and the preferred way of communication for many brands and public figures. Every policy change and new feature will of course be examined and debated. The challenge is high: to quote the new CEO of the firm, Twitter is a public place, and freedom of expression must be at the heart of the social network’s projects. On the other hand, he will have to pay attention to the numerous drifts that we can already observe, which could endanger the financial health of the company. Advertising being the most important source of income for the platform, a long-lasting loss of its advertisers as we can observe today would be a very bad sign for the future. We hope that under its new administration, Twitter will be able to offer us all the promises made in the last few weeks, but in the meantime, what better way to conclude :
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References :
https://www.lemonde.fr/pixels/article/2022/05/13/elon-musk-annonce-la-suspension-du-rachat-de-twitter-l-action-du-reseau-social-s-effondre_6125969_4408996.html
https://www.francetvinfo.fr/internet/reseaux-sociaux/twitter/twitter-comment-le-nouveau-systeme-de-certification-payante-voulu-par-elon-musk-a-seme-la-pagaille-sur-le-reseau-social_5472906.html
https://fr.wikipedia.org/wiki/Twitter
https://lexpansion.lexpress.fr/high-tech/twitter-blue-badge-officiel-les-premiers-changements-chaotiques-du-reseau-social-de-musk_2183363.html
https://finance.yahoo.com/quote/TWTR
https://www.lepoint.fr/monde/etats-unis-elon-musk-rachete-officiellement-twitter-28-10-2022-2495554_24.php#11
https://lexpansion.lexpress.fr/high-tech/twitter-blue-badge-officiel-les-premiers-changements-chaotiques-du-reseau-social-de-musk_2183363.html