When Elon Musk announced his plans to purchase Twitter. Many people believed that Twitter wouldn’t possibly accept the deal. Now that Twitter has accepted the deal, many people believe that the deal can’t possibly go through and the pushback against this prospect from some entities has been unprecedented. That’s why today I’m going to give you the background on Elon Musk’s plans to purchase Twitter. Why he’s doing it, whether he might succeed, and what it could mean for not just crypto but the internet itself.
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Who is Elon Musk? What is Twitter?
It’s time to lift the lid on Elon Musk’s plans. If you’re somehow unfamiliar with Elon Musk and Twitter, here’s what you need to know. Elon Musk is the CEO of Tesla, which builds electric cars. He is the founder and CEO of SpaceX, which builds rockets for space exploration. Musk is also the founder of the Boring Company, which builds underground tunnels to optimize traffic in urban areas. The co-founder of Neuralink, which is working to implant computer chips into people’s brains, and the co-founder of OpenAI, a company that researches artificial intelligence, where he finds the time to be the world’s most famous tweeter, is beyond me. Maybe he’s managed to clone himself too now.
Elon even co-founded a software company with his brother in the late 1990s, which they sold for 300 million dollars. They also founded a payments company that merged with another payments company to become PayPal, which was then sold to eBay in 2002 for $1.5 billion, 175 million of which went to Elon. Not bad for starters.
Elon is now the richest person in the world with a net worth of well over 200 billion dollars. 60 billion more than Louis Vuitton’s founder and CEO, Bernard Arno, who’s in second. What’s interesting is that Elon’s net worth is almost entirely derived from his holdings of Tesla stock and SpaceX shares. Elon holds 17% of Tesla’s total stock and holds around 48% of SpaceX. Tesla’s market cap is $670 billion, and SpaceX’s valuation is reportedly $100 billion, hence Elon’s 200 billion net worth.
What’s even more bizarre is that Elon sold all seven of his homes earlier this year as part of his plan to reduce the number of possessions he owns. Wait, it gets better. This means Elon is technically homeless, and he’s mentioned in interviews that he sleeps in the spare rooms of his friend’s homes. Elon claims his only remaining possession is his private jet, which he uses to get around and only keeps because it’s faster than any alternative means of transportation and therefore gives him more time to work. You’ll own nothing except a private jet and be happy.
As many of you will know, Elon is a fan of cryptocurrency. He personally holds bitcoin, ethereum, and dogecoin, and he added 1.5 billion dollars of BTC to its corporate balance sheet early last year. Tesla has since come to accept dogecoin as a payment method for its merchandise, with SpaceX expected to follow suit.
As many of you will also know, Tesla was going to accept BTC as payment but backed out in May last year on the grounds that bitcoin mining was bad for the climate. This caused institutions to look at Bitcoin through an ESG lens, which coupled with China’s cracking down on mining, resulted in last year’s crash. Elon has since stated that Tesla will accept BTC again once most of the bitcoin mining is done with renewable energy, and it looks like we’re getting close, so keep your eyes out for that white swan.
As for Twitter, it’s a popular social media platform that claims to have around 330 million monthly users and has 200 million daily users, according to Statista. Twitter was founded in 2006 by four blokes, but the only one you need to know is Jack Dorsey. Jack served as the CEO of Twitter until 2008, when he became chairman of Twitter’s board after it went public. Jack became Twitter CEO again in 2015 but stepped down in November last year and stepped down from Twitter’s board in May this year.
It’s generally believed that Jack left Twitter to focus on his second company, Square Inc., a payments company that rebranded to Block Inc. late last year to highlight the company’s shift in focus from traditional payments to cryptocurrency. It’s possible that Jack was ousted as the CEO of Twitter by its board of directors precisely because he had become so focused on cryptocurrency. Though obviously, there’s no way of confirming this. The only real circumstantial evidence is that Twitter stock jumped on the news of Jack’s departure. It’s also generally believed that Jack is the person who convinced Elon that Bitcoin can be environmentally friendly, and the b-word event discussion is what Jack set up for Elon. Last summer, other institutional investors last summer, coincidentally caused the crypto market to recover and later rally to new highs.
More recently, Tesla partnered with Block Inc. and bitcoin company Blockstream to mine BTC using solar power in the great crypto state of Texas.
Elon Twitter History
Anyway, Elon’s plan to purchase Twitter seems to have its roots in two things. The unprecedented restrictions that were imposed by almost every government in response to the pandemic and the sanctions levied against Russia in response to its invasion of Ukraine. As some of you will know, Elon was vocally opposed to pandemic restrictions from the start and went as far as relocating Tesla’s headquarters from California to Texas last year after California authorities forced Tesla’s factory to shut down in compliance with the state’s lockdowns. As some of you will also know, shortly after the pandemic began, social media platforms began labeling certain claims, scientific studies, and sometimes even official government data as ‘misinformation’. Naturally, Elon’s own comments were subject to these so-called fact checks.
In January of this year Elon was vocally supportive of the protests against pandemic restrictions in Canada, which ended with many protesters being arrested and the bank accounts of many protesters and even supporters of the protests being frozen by government decree. That’s why it’s nice to have BTC.
When Russia invaded Ukraine in February this year, Elon responded by telling SpaceX to immediately ship thousands of Starlink devices to the country so that Ukrainian soldiers and citizens could have access to the internet for their operations. Astonishingly, the Starlink devices arrived less than four days later.
By early March, governments around the world had levied unprecedented sanctions against Russia. It didn’t take long for them to begin to demand that Starlink begin blocking Russian news sources. Elon responded with “We will not do it unless at gunpoint. I’m sorry to be a free speech absolutist”.
At the same time, Elon specified that the demands to block Russian news sources were not even coming from the Ukrainian government but from other unspecified governments. Talk about an information war.
At the same time, social media platforms took a page from the pandemic playbook by labeling certain claims, articles, historical studies, and sometimes even official government statements as Russian misinformation, disinformation, or propaganda. Facebook and Instagram even went as far as changing their content policies to allow for calls for violence against Russians, which is truly unprecedented. These and other events are ultimately why Elon pushed a now famous poll on Twitter at the end of March, which stated:
As you can see, over 70% of people voted no before the poll ended. Elon emphasized in a reply that the consequences of this poll would be important. Please vote carefully. Once the poll had concluded, Elon admitted that he was considering building his own social media platform that would prioritize free speech. What many people didn’t know was that Elon had already begun accumulating Twitter shares in the weeks before the poll. On March 14th, he passed the 5% ownership threshold. Sneaky chap.
Elon Buys Twitter
Anywho, in early April, SEC filings revealed that Elon had purchased 9.2% of Twitter’s total shares, making him the largest shareholder next to asset managers like Blackrock, Vanguard, and Morgan Stanley.
Just five days later, Twitter CEO Parag Agrawal subsequently announced that Elon had been appointed to Twitter’s board of directors. Just five days earlier, however, Parag announced that Elon would not be joining Twitter’s board after all, leading to lots of theories as to what Elon’s end game really was just four days after Parag’s second announcement. Elon revealed his ultimate goal in a sec filing, which was to buy Twitter outright. Now I’ll read the offer in its entirety because it’s seriously epic, so
‘I invested in Twitter as I believed in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy. However, since making my investment, I now realize the company will neither thrive nor serve this societal imperative in its current form. As a result, Twitter needs to be transformed into a private company asap. I am offering to buy 100 shares of Twitter for 54.20% per share in cash, a 54.20% premium over the day before I began investing in Twitter and a 38.20% premium over the day before my investment was publicly announced. My offer is my best and final offer, and if it is not accepted, I would need to reconsider my position as a shareholder. Twitter has extraordinary potential. I will unlock it.’
Now for those like me whose maths is terrible, Elon’s offer amounted to 44 billion dollars. In case you missed that last part, Elon basically said that he would dump his Twitter stock. If Twitter didn’t accept his acquisition offer, which is pretty intense to say the least. Twitter initially resisted and went as far as to take the poison pill. This means that Twitter gave itself the power to create new shares out of thin air if Elon starts to buy. This is to prevent Elon from taking a majority stake in the company, but also makes Twitter stock unattractive to investors, hence the poison pill.
In the days that followed, however, a series of events transpired that called the legal obligations of Twitter’s board of directors to Twitter shareholders into question, namely the revelation that Twitter’s board members hold next to no Twitter shares themselves.
Not only that, but Twitter’s quarterly earnings report was less than two weeks away. Many expected that it would be significantly below investor expectations and cause Twitter’s stock to tank. What’s funny is that Twitter stock had only been pumping in response to the news about Elon’s acquisition plans. Realizing that Elon had simultaneously secured the 44 billion in funding and successfully cornered the company, Twitter’s board of directors unanimously voted to approve Elon’s purchase on Monday the 25th of April, just three days before Twitter’s quarterly earnings, which, of course, came in below expectations. What’s strange is that just a few hours later, many Twitter personalities began reporting they had experienced a massive spike in followers, leading to speculation that Twitter’s engineers had rushed to lift a long-standing shadow ban on certain individuals and topics, destroying the evidence.
Meanwhile, the UK and EU began warning Elon that he must follow their laws or else. The United States went as far as establishing the ‘disinformation governance board’, or ministry of truth, which was paused three weeks later because of all the bad press and good memes. If that wasn’t revealing enough, the EU, USA and 32 other non-EU countries also announced a quote declaration for the future of the internet and 26 non-profit organizations signed an open letter opposing Elon’s twitter acquisition, leading Elon to openly ask who all these NGOs are being funded by.
This unprecedented pushback also inspired Elon to troll by saying things like he might die under mysterious circumstances and that he will give control of twitter to youtuber Mr. Beast if he does. Elon also began tweeting about all the political and corporate scandals that had been in his memory. The mainstream media holds the mainstream media’s memory. Holding headlines is one of the reasons why our weave was invented.
Elon Pauses Twitter Deal
On the 13th of May, the Twitter party came to a pause when Elon announced that the Twitter deal had been put on hold until he could verify that only five percent of Twitter’s users were bot accounts, as per a filing made by the company earlier that month. Note that Elon said he was still committed to the acquisition.
A few days later, Tesla was suddenly kicked out of the S&P 500 ESGI index, which is insane given that Tesla makes electric vehicles and its motto is literally to ‘accelerate the world’s transition to sustainable energy’. Elon was understandably pissed off and went on to call ESG a scam, and it’s easy to see why.
The architects of ESG shrugged off Elon’s ESG frustrations, saying they’re sure that Tesla scores high in all the other ways ESG is measured. This arguably confirms that Tesla was being targeted by the private sector because of Elon’s Twitter acquisition. If you need more proof, look no further than Microsoft co-founder Bill Gates’s multi-billion dollar Tesla, which Elon slammed as contradicting Bill’s supposed climate concerns.
Earlier this month, it was reported in many places that Elon was looking for ways to exit the deal. This is because a letter from Elon to Twitter’s general counsel claimed that Twitter had not kept its side of the bargain, specifically that Twitter had refused to disclose the details about its true user account. For context, part of the acquisition deal involves a one billion dollar fine for whichever party fails to uphold their end of the deal. Many mainstream media outlets seem to imply that Elon was trying to weasel out of the deal to get his hands on this money, which, given Elon’s record wealth, is pretty farfetched. I imagine Elon could find a billion dollars down the back of the sofa if he owned a sofa.
Last Tuesday, the Texas attorney general threatened to take Twitter to court if it didn’t comply with Elon’s demand to see the data the next day. Twitter said it would give Elon all the data he wanted while also slowing him down. Though it’s possible that the pressure from Texas played a role, it’s more likely that the scathing letter Elon sent to the SEC on Monday was the primary reason.
The more important Wednesday development was that Twitter’s executives assured employees that the deal was still going to go through. All the paperwork would be done sometime this summer and Elon would be taking the reins at Twitter sometime this autumn or early next year.
Tesla executives also noted that Elon might not allow them to work from home once he takes the helm, probably because Elon recently told Tesla employees that if they want to work from home they can find another job. It’s safe to say that Tesla is a very different company than Twitter, but you know, whatever.
In any case, if all the opposition Elon has been facing wasn’t enough, the U.S. ministry of transportation recently announced that it is investigating Tesla’s autopilot feature, which could result in over 800,000 Tesla cars being recalled. Don’t worry, I’m sure it has nothing to do with Elon’s Twitter acquisition. I mean, it’s not like most of the money Elon is using to buy Twitter is coming from a loan he took against his Tesla stock, which would see a big drop in value if 800,000 Tesla cars are in fact recalled.
What Does It Mean For Crypto?
Now this brings me to the big question. It’s whether Elon will succeed in his Twitter takeover and what that could mean for the internet itself and for cryptocurrency too. As things stand, it looks like Elon’s Twitter acquisition will go through as planned. The only wild card is the one I just mentioned: Tesla stock crashing to the point that Elon’s multi-billion dollar loan is liquidated. For what it’s worth, it looks like Elon knows exactly what he’s doing.
There’s also no shortage of crypto companies who are ready to help if need be. For example, Binance recently contributed 500 million dollars to Elon’s Twitter acquisition as part of a bigger 7.2 billion contribution by other companies, which included storied VC and Sequoia Capital, which put in 800 million. This is simply because Elon has been explicit about his intentions to integrate crypto with Twitter in several ways, such as making it possible to pay for Twitter’s subscription services with dogecoin and making it possible to transfer crypto and fiat between Twitter users.
Elon is also committed to fighting crypto spam, crypto scams, and bots of all kinds. Many believe Elon’s bot-busting obsession is a part of why there’s been so much pushback from legacy institutions. Many of them might be using bots to push certain narratives, which wouldn’t be all that surprising given Elon’s plans to weed out scams. Spam and bots will also necessarily come with some kind of identification system, be it a monthly subscription or even just a unique phone number. Some have suggested using a small amount of crypto as collateral to prove the existence of a unique ID. Vitalik Buterin’s idea of having a non-transferable soul could work too.
Anyhow, in the true spirit of crypto, Elon will even open source Twitter’s code for anyone to analyze and notify users if and when their tweets are being manipulated by Twitter’s algorithms, assuming Elon allows them to exist at all. This transparency will keep Twitter in check.
The most significant change to Twitter, however, will be its focus on free speech, which has been completely blown out of proportion by media pundits and politicians. That’s because Elon specified in a Ted Talk interview in mid-April that Twitter will abide by whatever speech laws are present in the countries.
As it operates in the United States, almost all speech is protected under the first amendment, save for obvious things like calls for violence, defamation, copying someone else’s work, and obscene content.
If you ask me, this is the real reason why legacy institutions are up in arms about Elon’s Twitter acquisition. Allowing the truth to flow freely will do lots of damage to the illusions that many of these legacy institutions have established. With the midterm elections coming up, these legacy institutions are desperate to maintain their illusions at all costs or else they will be voted out directly or indirectly at the ballot box. Case in point, Google search trends for fact checking explode every time there’s a US election.
So in sum, Elon’s acquisition of Twitter could unironically change the world, and there’s no doubt that he knows that the real question is how hard the existing institutions will fight to maintain their illusions and what the average person will do when the truth comes to light. It looks like we’re about to find out. By the way, apparently all this was made possible by Jack Dorsey himself, so be nice to him. Bitcoinmaxis are people too, after all.
[This article is a transcription of a video made by Coin Bureau]
Original video: https://youtu.be/b-dUIWGX5tY ]