Tom Krisher And Matt O’brien, The Associated Press – Oct 26, 2022 / 1:24 pm | Stories: 392791
Photo: The Canadian Press
FILE – Elon Musk speaks at the SATELLITE Conference and Exhibition on March 9, 2020, in Washington. Musk posted videos Wednesday, Oct. 26, 2022, showing him strolling into Twitter headquarters ahead of a Friday, Oct. 28, deadline to close his $44 billion deal to buy the company. (AP Photo/Susan Walsh, Files)
Elon Musk posted video Wednesday showing him strolling into Twitter headquarters ahead of a Friday deadline to close his $44 billion deal to buy the company.
Musk also changed his Twitter profile to refer to himself as “Chief Twit” and his location as Twitter headquarters, which is based in San Francisco. The video showed him carrying a sink through a lobby area.
“Entering Twitter HQ – let that sink in!” he tweeted.
Entering Twitter HQ – let that sink in! pic.twitter.com/D68z4K2wq7
— Elon Musk (@elonmusk) October 26, 2022
A court has given Musk until Friday to close his April agreement to acquire the company after he earlier tried to back out of the deal. Neither Musk nor Twitter has said if the deal is closed yet.
Despite Musk’s splashy entry to headquarters, it wasn’t clear yet whether his purchase of Twitter had been finalized. Twitter confirmed that Musk’s video tweet was real but wouldn’t comment further. Alex Spiro, Musk’s lead lawyer, didn’t immediately return a request for comment.
The Washington Post reported last week that Musk told prospective investors that he plans to cut three quarters of Twitter’s 7,500 workers when he becomes owner of the company. The newspapers cited documents and unnamed sources familiar with the deliberation.
One of Musk’s biggest obstacles to closing the deal was keeping in place the financing pledged roughly six months ago.
A group of banks, including Morgan Stanley and Bank of America, signed earlier this year to loan $12.5 billion of the money Musk needed to buy Twitter and take it private. Solid contracts with Musk bound the banks to the financing, although changes in the economy and debt markets since April have likely made the terms less attractive. Musk even said his investment group would be buying Twitter for more than it’s worth.
Less clear is what’s happening with the billions of dollars pledged to Musk by investors who would get ownership stakes in Twitter. Musk’s original slate of equity partners included an array of partners ranging from the billionaire’s tech world friends with like-minded ideas about Twitter’s future, such as Oracle co-founder Larry Ellison, to funds controlled by Middle Eastern royalty.
The more equity investors kick in for the deal, the less Musk has to pay on his own. Most of his wealth is tied up in shares of Tesla, the electric car company that he runs. Since April, he has sold more than $15 billion worth of Tesla stock, presumably to pay his share. More sales could be coming.
Musk’s flirtation with buying Twitter appeared to begin in late March. That’s when Twitter said he contacted members of its board — including co-founder Jack Dorsey — and told them he was buying up shares and was interested in either joining the board, taking Twitter private or starting a competitor.
Then, on April 4, he revealed in a regulatory filing that he had become the company’s largest shareholder after acquiring a 9% stake worth about $3 billion.
At first, Twitter offered Musk a seat on its board. But six days later, CEO Parag Agrawal tweeted that Musk would not be joining the board after all. His bid to buy the company quickly followed.
When Musk agreed to buy Twitter, he inserted a “420” marijuana reference into his price of $54.20 per share. He sold roughly $15 billion worth of shares in Tesla to help fund the purchase, then pulled together commitments for billions more from a diverse group of investors including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.
Inside Twitter, Musk’s offer was met with confusion and falling morale, especially after Musk publicly criticized one of Twitter’s top lawyers involved in content-moderation decisions.
In July, Musk abruptly reversed course, announcing that he was abandoning his bid to buy Twitter. His stated reason: Twitter had not been straightforward about its problem with fake accounts he dubbed “spam bots.” Twitter sued Musk in the Delaware Chancery Court to force the deal through. Two weeks before a 5-day trial was scheduled to begin, Musk changed his mind again, saying that he wanted to complete the deal after all.