Early this morning Elon musk filed an offer to take Twitter private by purchasing 100% of shares for $41 billion or $54.20 per share (which of course includes the number 420). His filing states "I believe free speech is a social imperative for a functioning democracy" and "Twitter has extraordinary potential. I will unlock it".
This news, of course, had the social media app buzzing all day. Will the Twitter board take this offer? What happens if Elon takes the company private? What happens if the board refuses the offer? How can he do this?
First it should be noted that takeovers of public companies had an average premium of 24-32% (per data from 2017-2019). Elon Musk's offer represented an 18.2% premium on Wednesday's close, however this premium would likely grow significantly if the market truly believes his intent to sell all his shares if his offer is rejected. Given his leverage of the situation, his premium actually seems more reasonable than at a first glance. Furthermore, Twitter is >70% institutionally owned which means if they decline this offer, they are violating their fiduciary duties. This definitively puts the board in a precarious situation, and if anything, has been entertaining to watch unfold.
As Elon himself put it:
Now there will absolutely be broad implications here whether Elon's offer is accepted or not. Twitter has become a place where censoring prominent voices has been the norm over the last few years. Elon is proclaiming that he will enable free speech to reign on Twitter (as long as nothing posted is illegal). While this sounds like a noble cause, the devil will always be in the details and execution.
From a Bitcoiner's perspective, pushing freedom of speech should be applauded. However, it is hard to ignore the route Elon is taking to potentially get to that point. Elon's takeover puts on full display the issue with proof-of-stake systems and governance structures. It is clear that you can buy control in companies and systems that are equity-like. And this places it in stark contrast with Bitcoin, which is a system you cannot buy control in. Elon owns Bitcoin, however, owning more Bitcoin does not give him more control of this network.
This takeover puts emphasis on the need for decentralized alternatives. While his goal may be to push freedom of speech, any man with 100% control of a platform has biases which may lead to censoring opposing voices.
It is hard to say if Elon is a net good or negative actor here. He recently announced partnership with Blockstream to mine Bitcoin with solar energy. He also owns Bitcoin and Tesla owns Bitcoin, however his consistent rehashing of old fud, such as stating Bitcoin block-size is too small, leaves many wondering if he truly understands the design and incentive structures of this network. His infatuation with Doge also leaves many wondering his motives.
With that being said, Elon buying Twitter would likely be bullish for crypto as a whole. Elon certainly understands that Twitter has potential well beyond 280 characters. As Jack Mallers, CEO of Strike, noted in a tweet today, Elon "has an opportunity to build payment experiences" on Twitter. These payment experiences could be countless, but would likely include continuing to disrupt cross-borders remittances with Bitcoin and the Lightning Network.
As the Twitter board continues to weigh their decision, one thing is for sure - the outcome will be entertaining.