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Post by Admin on Apr 22, 2022 21:22:48 GMT
Elon Musk has unveiled a $46.5 billion financing package to fund his takeover bid for Twitter as he pushes ahead with a deal that would be one of the largest leveraged buyouts in history. It is the biggest acquisition financing ever put forward for one person. Elon Musk is doing it his way. More than two-thirds of the $46.5 billion financing package that Musk unveiled on Thursday in support of his bid for Twitter Inc (TWTR.N) would come from his assets, with the remainder coming from bank loans secured against the social media platform's assets. read more That is the reverse of how most investors structure buyouts, with debt secured against the assets of the target company typically comprising the majority of the financing. The banks backing Musk's bid balked at providing more debt secured against Twitter, arguing that the San Francisco-based company did not produce enough cash flow to justify it, people familiar with the matter said. Some banks were also worried that financial regulators could reprimand them if they took on more risk, the sources added. This will have an impact on Musk's returns, since debt secured against an acquired company can greatly amplify profits. To double the $33.5 billion Musk is contributing out of his own fortune to the buyout, Twitter's value would have to go up by 1.4 times. Had he put in only a third of the deal consideration as equity, Twitter's value would have to go up by only 0.7 times for that money to double.
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Post by Admin on Apr 24, 2022 0:49:28 GMT
Elon Musk secures billions to finance Twitter takeover 153,392 views Apr 22, 2022 Tesla CEO Elon Musk moves closer to a Twitter takeover after securing funds for offer. FOX Business' Kelly O'Grady with the latest.
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Post by Admin on Apr 25, 2022 20:48:09 GMT
Elon Musk Reaches Deal To Buy Twitter 3,911 views Apr 26, 2022 Elon Musk has bought Twitter for a price of approximately $44 billion. He has released a statement on how he hopes to improve the social media platform after its acquisition. NBC's Jo Ling Kent has details.
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Post by Admin on Apr 26, 2022 13:19:59 GMT
Musk's effort to buy Twitter and "unlock" its potential makes him the latest in a long line of people who have kicked the company's tires since its 2006 launch, stirring up fresh excitement and speculation, only to walk away empty-handed. "It feels like Twitter has been up for sale for a while. It's just nobody wanted to go forward because of the challenges," says Bloomberg Intelligence technology analyst Mandeep Singh. In early 2020, the hedge fund Elliott Management took a stake in Twitter and pushed to replace then-CEO Jack Dorsey, blaming his lack of focus for the company's sluggish growth and low share price. Now, it's Musk's turn. The Tesla CEO last week launched a hostile takeover bid that has sent the company's board and management into crisis mode. With Musk's advance getting more serious by the day, Twitter will be forced to confront its long-standing problems like never before. Since Twitter went public in 2013, it has reported an annual profit only twice, in 2018 and 2019. Analysts say this reflects Twitter's fundamental business struggle: getting people to use its service and getting advertisers to spend their money there. Facebook and Google have grabbed the lion's share of online ad dollars by letting brands target people based on their interests and what they're searching for. Twitter, on the other hand, hasn't been able to convince many advertisers that it's worth inserting themselves into the site's fast-moving and often acidic reaction to events of the day. Twitter dominates the political discourse and shapes the news, thanks to its hold among politicians, world leaders, celebrities and journalists. But its popularity is limited. Around 80% of U.S. adults don't use Twitter. Globally, it does not rank among the top 10 social networks by monthly users. (Facebook and YouTube are the most popular platforms.) Last year, Twitter brought in $4.5 billion in advertising revenue, compared with $115 billion at Meta, the parent organization of Facebook and Instagram, and $28.8 billion at YouTube. While Twitter has succeeded in attracting big brands around major news moments, it hasn't lured the smaller advertisers that make up the backbone of Facebook's ad business, says Singh of Bloomberg Intelligence. " the breadth of advertisers, whereas Twitter is very concentrated among large brands. And so that's why Twitter does well when you have got large events like the Olympics or an election" but struggles at other times, he says.
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Post by Admin on Apr 26, 2022 16:42:46 GMT
All eyes are now on Twitter's board But Musk's entry into the picture has thrown everything about Twitter's future into doubt.
"It's a distraction from the work," Pao, the former Reddit CEO, says. "A distraction from doing the work of running the company and building a product and trying to deal with all of the hate and harassment that people experience using the product."
In his first months as Twitter CEO, Agrawal, who is relatively unknown outside the company, has been juggling pressure to meet the goals set by Elliott Management and a newborn at home.
The board's decision to adopt a so-called poison pill, which would make it more difficult and expensive for Musk to try to buy more of the company, suggests it is unlikely to accept the billionaire's offer of $54.20 a share, at least in its current form.
But the board will have to explain why, given that Twitter's shares closed on Friday at $48.93.
"As a board member, you can't deny that there is an offer that is much higher than where the stock is currently trading," says Bloomberg's Singh.
If Twitter rejects Musk's offer, he says, it will have to give "a very good reason and really show the shareholders your plan in terms of how you think the company will be better off on a stand-alone basis, which none of the prior CEOs have been able to do."
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