Musk Secures Funding as Extra Hints of his Twitter Plans Slowly Filter Via
So what’s the most recent on Elon Musk’s nice Twitter takeover?
It’s been fairly quiet on the Elon entrance this week, however within the background, Musk has been busy shoring up funding, with the intention to fund his $44 billion takeover bid for the social media platform.
As we speak, in a new filing with the SEC, it was revealed that Musk has raised over $7 billion in funding commitments from a variety of companions, together with Sequoia Capital, Binance, Oracle chief Larry Ellison and Saudi Prince Alwaleed.
As you possibly can see from this itemizing, Ellison is the largest particular person contributor. Ellison can also be a director on the board of Tesla, whereas Oracle was additionally, at one stage, close to becoming the US owner of TikTok amid the Trump Administration’s push to drive the platform into American possession.
Ellison additionally has a good relationship with former US President Donald Trump – which is both fully coincidental or vastly related right here, relying in your perspective.
The extra funding commitments will be certain that Musk can go forward with the Twitter deal, with these contributors to behave as fairness companions, that means they may even profit from any income that Musk is ready to glean from the social app.
Which can be tough. Twitter has lengthy struggled to considerably enhance its income, and has been working to reform its enterprise parts to satisfy tough new performance thresholds set by shareholder teams. Most market analysts don’t see how Twitter will be capable to reverse course and grow to be an even bigger money-making machine, whereas Musk has additionally flagged cutting ads entirely, which contribute 98% of Twitter’s income, as a part of his broader free speech push.
However there have been some inklings of Musk’s plans right here.
Briefly notes and missives, plainly Musk could also be planning to cease advertisements, and take Twitter fully non-public for a time, earlier than launching a second IPO, and reimplementing advertisements at a later stage.
That plan has obtained tacit endorsement from former CEO Jack Dorsey, who additionally agrees that the corporate’s reliance on advertisements has impeded its potential.
that is true. it wants cowl for some time.
— jack⚡️ (@jack) May 5, 2022
That’s an attention-grabbing proposal, and clearly, given the investments Musk has secured, he will need to have some plan for additional monetization. These traders aren’t simply placing cash into Elon’s Twitter undertaking as a result of they wish to assist his hobbies.
Which is de facto the place the Musk takeover is attention-grabbing – as a result of from the surface, it does appear to be a passion horse for Musk. Elon is clearly obsessed with Twitter, and his push for supporting free speech, however given his stances on moderation and advert reliance, there doesn’t look like a enterprise focus right here, it does appear to be it’s only a wealthy man throwing his money round to make the platform what he needs.
However that’s positively not the case. Whereas I’d anticipate Musk to make the strikes that he’s publicly said, by way of lowering advert reliance and reforming the platform’s moderation insurance policies, there should even be a long term technique there, whether or not that’s by way of elevated subscriptions, selling tweet embeds or every other imprecise technique that Musk has outlined to this point.
On the subscriptions entrance, my authentic view right here was that Musk would doubtless look to push to make all users pay for Twitter access, whereas additionally verifying their particulars to make sure that they’re not bot accounts, one other of his focus points.
Then earlier this week, Musk shared this:
Twitter will all the time be free for informal customers, however possibly a slight value for business/authorities customers
— Elon Musk (@elonmusk) May 3, 2022
So plainly whereas Musk is contemplating a brand new subscription mannequin, it gained’t be utilized to common customers.
There’s nonetheless not a heap to go on, and there’s nonetheless a option to go in securing the ultimate approvals that may see Musk’s Twitter deal undergo. However the funding is now prepared, the method is in movement, and reviews counsel that Musk will act as Twitter CEO for a while as the small print are finalized, taking on from Parag Agrawal.
Count on job cuts and program adjustments, whereas you can too anticipate Twitter’s focus to shift dramatically inside this preliminary interval.
How that adjustments your day-to-day tweet expertise, we’ll have to attend and see.