[Epoch Times, April 29, 2022]Twitter Inc accepted a $44 billion takeover offer from Elon Musk earlier this week. Three people familiar with the matter said Musk told the banks that had agreed to help finance that he could take pay cuts for the social media giant’s executives and board of directors to drive cost-cutting and pioneer new ways of doing business that would use push Make money.
Reuters reported that Musk was trying to finance a takeover just days after submitting a takeover offer to Twitter on April 14, a source he said was pitching the idea while lobbying lenders. His bank pledge, presented on April 21, was key to Twitter’s board accepting its “best and final” offer.
Musk has to convince the bank that Twitter has enough cash flow to pay off the debt he has demanded. He ended up getting a $13 billion loan secured by Twitter and another $12.5 billion margin loan tied to Tesla stock. As for the remaining consideration, he agreed to pay in his own cash.
According to Forbes, Musk has a net worth of $246 billion, making him the richest man in the world.
Twitter announced on Monday (April 25) that it has accepted an offer of about $44 billion from Tesla CEO Elon Musk.
The plans outlined by Musk for the bank were just his vision, not a firm commitment, the sources said, and there was no specifics.
Musk: Will open up a new business model for Twitter
Musk has tweeted about eliminating salaries for Twitter board members, which he said could save about $3 million in costs. Twitter’s stock-based compensation was $630 million for the 12 months ended Dec. 31, 2021, a 33% increase from 2020, company filings show.
Musk also noted in his pitch to the bank that Twitter’s gross margins are much lower than peers like Meta’s Facebook and Pinterest, which he believes leaves room for a more cost-effective way of running the company. Lots of space.
A representative for Musk declined to comment.
Bloomberg News reported earlier on Thursday (April 28) that Musk specifically mentioned the layoffs as part of his pitch to the bank. One of the sources said Musk would not make a decision on layoffs until he takes ownership of the company later this year.
Musk told the bank that he also plans to develop features to increase business revenue, including a new business model that makes money by including important information or hot tweets, the sources said. For example, fees are charged when third-party sites want to quote or embed verified tweets from individuals or organizations.
In a tweet earlier this month, Musk suggested a series of changes to the social media giant’s premium subscription service (Twitter Blue), including lowering prices, banning ads and offering the cryptocurrency dogecoin payment option. The Twitter Premium subscription service now costs $2.99 per month.
In another tweet he has since deleted, Musk said he wanted to reduce Twitter’s reliance on advertising, which now generates most of Twitter’s revenue.
Musk said he would support the bank’s marketing of syndicated debt to investors, at which point he may reveal more details of his business plans for Twitter, the sources said.
Musk has also sought out a new CEO for Twitter, one of the sources added, but declined to identify that person.
Musk also told the bank that he would seek moderation policies as liberal as possible on the social media platform, subject to the laws of every jurisdiction in which Twitter operates, the sources said. Musk has publicly repeated this position.
The $13 billion loan is equivalent to seven times Twitter’s projected 2022 earnings before interest, taxes, depreciation and amortization. That was too risky for some banks, who decided to only offer margin loans, the sources said.
Responsible editor: Lin Yan#