HomeBusinessHow Twitter's Board Went From Fighting Elon Musk to Accepting Him

How Twitter’s Board Went From Fighting Elon Musk to Accepting Him

On April 24, ten days after the richest man in the world, Elon Musk laid out an unsolicited bid to take over the big tech social media handle, Twitter. Taken aback by the proposal that came out of the blue, the company panicked and adopted the poison-pill defence manoeuvre to stop the Tesla CEO from acquiring more stakes in the company. But Twitter soon ran out of choices by Sunday of that week, as Musk had already lined up all the financing required for his transaction, and poked the company with his Tweets.

Elon-Musk-Twitter
Elon Musk

After several hours of discussion among the 11 member board of Twitter, the answer to most of the important questions like ‘could the company be worth more than just 54 dollars a share?’ and ‘would they find another fitting bidder?’ came out negative. And so, less than 24 hours later, the blockbuster takeover deal between Twitter and the SpaceX founder worth $44 billion was announced.

“What I’ll tell you is that based on the analysis and the perception of risk, certainty and value, the board unanimously decided the offer from Elon represented the best value for our shareholders,” -said Twitter Chairman Brett Taylor on Monday, speaking to the more than 7000 employees of the Bluebird company via a call.

Why did Twitter impose the poison pill in the first place? 

One of the most intriguing central mysteries surrounding Mr Musk’s acquisition of Twitter is how the company’s board of directors went from implementing a poison pill to agreeing to the multi-billion dollar takeover deal in a matter of just 11 days. The use of a poison pill usually results in a protracted battle in most megadeals. The strategy is a clear indication that a company intends to fight. Negotiations then drag on while buyers occasionally walk away.

Interviews with around a dozen people familiar with the transaction who were not authorised to speak publicly revealed Twitter’s board’s limited options.

Twitter chairperson Brett Taylor
Twitter chairperson Brett Taylor

While deal advisers are prepared to deal with a variety of buyers that include hostile ones, aggressive ones, those who lowball and are then open to negotiations, Twitter faced an acquirer in Mr Musk, who was not in any deal playbook. Essentially, he was an “unknown quantity” acquirer, that is, one who would not budge on price or be open to negotiations, and was willing to publicly trash the company and use his enormous wealth to complete an agreement with limited diligence.

Edward Rock, a professor of corporate governance at the New York University School of Law said, “Normal buyers might actually say, ‘Well, you know, we actually want to talk to the folks inside and see how is the business going and get more data than is available to the public. What was interesting,” he said, is that the Twitter board “reached a deal in a short period of time — and such an unconditional deal.”, calling the deal’s speed “unusual.”

The SpaceX founder started laying the groundwork for the deal way back in January, when he started purchasing Twitter stocks and eventually acquiring more than 9%, becoming the largest shareholder. Twitter later offered Mr Musk a seat on the Twitter board, which he briefly agreed to, before changing his mind eventually.

Musk plans to “put the cocaine back in”

After finalising the multi-billion dollar takeover deal with the big tech social media company Tesla CEO Elon Musk tweeted that he now plans to acquire the soft drink brand Coca Cola to “put the cocaine back in”. Musk made the Tweet in the late hours of Wednesday that read, “Next I’m buying Coca-Cola to put the cocaine back in”.

Elon Musk’s Coca Cola tweet sparked a flurry of humorous responses, including one that implored Elon to “bring it back” and shared an image of what appears to be one of the first publicly sold Coca-Cola bottles in 1894 – though this could not be verified and could be an image of a larger container used to serve the drink. Another Twitter user doctored Musk’s tweet to what read as “Now I’m going to buy McDonald’s and fix all the ice cream machines…’’. The billionaire entrepreneur traded the joke and responded through his Tweet that read, “Listen, I can’t do miracles, ok.” In a follow-up Tweet Musk said, “Beats the hell out of Red Bull!”

Also read| Elon Musk jokes he’s planning to buy Coca Cola

Coca-Cola is one of the world’s most recognizable and beloved carbonated soft drink brands, and the refreshing, although unhealthy, fizzy brown beverage is consumed by millions of people all around the globe, every single day. However, when chemist John Stith Pemberton created the original Coca-Cola formula in 1886 in a pharmacy in Atlanta, Georgia, he referred to it as a “brain tonic.” Coca-first Cola’s advertisements positioned the beverage as a cure for ‘Morphine, Opium Habits, and Desire for Intoxicants.’

Coca Cola

However, the two ingredients that gave Pemberton’s soda drink its name were highly addictive. Coca-early Cola’s versions contained kola nut powder to provide a caffeine boost, as well as coca leaf extract, which contained trace amounts of cocaine – around 3.5 milligrams per bottle until 1903 when it was removed.

Sugar syrup spiced with citric acid, nutmeg, vanilla, and Chinese cinnamon oil were also included in the original recipe. However, the high caffeine levels in Coca-Cola persisted until the end of World War One. By 1908, anti-drug campaigners were criticizing America’s growing reliance on the drug and calling for a national ban.

 

 

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