<p>Elon Musk- one of the most innovative entrepreneurs of the 21st century, has launched a proposal to acquire Twitter following weeks of negotiations with the firm.</p><p>Musk bid $54.20 per share for Twitter, valuing the firm at around $43 billion. According to the billionaire, the firm has the "potential to be the global platform for free expression."</p><p>Elon Musk disclosed on Tuesday that he spent $2.8 billion to acquire a 9% stake in Twitter, making him the company's largest individual stakeholder. Twitter announced shortly afterward that he would be joining the company's board of directors. The stock price increased more than 20% in response to the revelation of Musk's ownership, and everyone associated with the firm began to speculate on how his involvement might affect the company's operations.</p><p>The arrangement for the board seat fell through four days later. Twitter CEO Parag Agrawal revealed Musk's withdrawal the previous day in an open letter to the company's employees on Sunday night. There was no explanation for the abrupt change, but sometime between Tuesday and Saturday, whatever deal had resulted in Musk joining the board had fallen apart.</p><p>Thus, the primary question that arises is what is going on here?</p><h3 id="how-does-elon-musk-feel-about-twitter">How Does Elon Musk Feel About Twitter?</h3><p>Musk has over 81 million followers on the site and routinely posts memes, updates on his company's space goals, and jokes about marijuana.</p><p>The billionaire acknowledged earlier this month that he had acquired more than 9% of the company, making him the largest stakeholder. His investment announcement comes only days after he openly questioned the company's commitment to free expression and hinted at the possibility of launching his social network.</p><p>It is strange! Our best perspective of the scenario comes from Agrawal's statement Sunday night, but the statement is purposely vague, providing few facts ("Elon stated... that he would no longer join the board") and strongly implying that there is more to the tale ("here is what I can tell about what transpired").</p><p>Twitter is a publicly listed corporation, Agrawal was pressed to issue a comment before Monday's market opening. Musk's appointment to the board of directors boosted Twitter shares, so any delay in announcing the news of his departure might raise concerns about insider trading. (Twitter even filed a formal SEC filing in conjunction with the CEO's remarks to ensure that all received the message.) However, Agrawal was not expressing anything more than was strictly necessary.</p><h3 id="what-background-check-is-all-about">What Background Check is All About?</h3><p>Elon's first appointment, Agrawal writes, was "conditional on a background check and official acceptance." With no other explanation available, several observers saw this as a hint that the background check uncovered material that disqualified Musk from serving on the board, explaining why everything happened so quickly and with such little explanation. It is not easy to conceive what the check would have discovered, but it's got to be delicious. Perhaps Musk is considering launching a Twitter competitor? Perhaps he has tied Dick Costolo in his basement!</p><p>Musk is one of the world's most carefully studied public characters, so it is difficult to picture anything too outrageous being concealed for long ? but we did learn last month that he had a secret child, so anything is possible.</p><p>The alternative interpretation is that Agrawal was attempting to allay any possible embarrassment following Tuesday's news, which made Musk's appointment to the board all but likely in days. Emphasizing the background check created the impression that Musk was hiding something dark and sinister, but it is the type of subtle political gaffe one could anticipate from a technically focused CEO who has been on the job for less than six months.</p><h3 id="what-is-elon-musks-motivation-for-attempting-to-acquire-twitter">What is Elon Musk's Motivation For Attempting To Acquire Twitter?</h3><p>Musk stated in a letter to Twitter board chair Bret Taylor that he wishes to take the business private to realize the firm's "amazing potential."</p><p>He stated that he believes the firm may serve as a "platform for free speech globally."</p><p>"However, after making my investment, I have come to recognize that the firm, in its current form, can neither flourish nor fulfill this societal necessity," he said, according to a copy of the letter included in an SEC filing. Elon Musk delayed submitting a tax return and earned $156 million?another point worth noting here.</p><p>Like most prominent social media firms, Twitter has struggled with the best way to control online material, striving to strike a balance between user protection and free speech.</p><p>Musk conducted a Twitter survey in late March, after acquiring a greater than 5% ownership in the firm but before announcing it, to see whether users believed Twitter adhered "rigorously" to the idea of free expression. Musk inquired if a new platform was necessary after most voters said "no."</p><h3 id="can-elon-musk-seize-control-of-twitter">Can Elon Musk Seize Control of Twitter?</h3><p>Not always. Twitter's board of directors announced that it will meet Thursday morning to evaluate the offer and "determine the course of action that it feels is in the Company's and all Twitter investors' best interests."</p><p>Musk's statement earlier this month of a significant investment in the firm sent the stock surging. However, in his letter to the board chair, he stated that if the firm rejects his bid to acquire Twitter, he will "need to reassess my position as a shareholder."</p><p>Already, the corporation is under pressure to reject the offer. A law professor at Tulane University, Ann Lipton, stated that the board would be on a "solid basis."</p><h3 id="what-does-elon-musk-want-from-twitter">What does Elon Musk Want From Twitter?</h3><p>This is the central question that has been growing since Elon Musk's billion-dollar equity purchase was announced last week. We still don't know why Elon purchased such a huge interest in Twitter or what he hopes to accomplish with the firm. If he was simply interested in having a say in how Twitter manages its platform, board membership makes sense. However, being a board member entails constraints on how much stock Musk may possess and what he may say, stemming from a larger obligation to act in the best interests of shareholders. If he intended to coerce the corporation into adopting a fundamentally different approach to moderation, the disadvantages of board participation may have exceeded the benefits.</p><p>The situation becomes even more pressing if Musk wishes to completely take over Twitter. When a wealthy individual acquires a substantial share in a firm, there is always the possibility of a hostile takeover ? and Twitter is particularly susceptible at the moment, with Jack Dorsey gone and activist investors ramping up the pressure. From his acrimonious relationship with Tesla's founders through Tesla's 2016 acquisition of SolarCity, Musk is no stranger to this type of financial power play. He possesses sufficient funds to acquire the firm six times over. If he wishes to seize control, he is undoubtedly capable of doing so.</p><p>Musk may be hesitant to do so for a variety of material reasons. He is already the CEO of two businesses and holds senior positions at three more. Twitter does not fit with his typical audacious engineering endeavours, and it is not a financially sound venture. Musk's public statements throughout the ordeal have been so erratic that it is difficult to discern his strategy if he even has one.</p><h3 id="conclusion">Conclusion</h3><p>Elon is not joining Twitter's board of directors, but with a 9% ownership in the firm, he will remain an enormously significant influence in the company's destiny. Because he is not a board member, he is more likely to exert his influence publicly, whether through increased financial manoeuvrings or more strident criticism of the company's actions. As Musk's continuing battle with the SEC demonstrates, he is not averse to making public pronouncements that can dramatically fluctuations in a company's value. If he left the previous week enraged, he would have several opportunities to settle the score.</p>

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