The $44 Billion Deal Will At Last Go Through. Musk Wants To Use Twitter To Create A Super App
Elon Musk has changed his mind and is buying Twitter at last. The main reason is probably to avoid the lawsuit.
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It is possible that Elon Musk could buy Twitter as early as Friday, October 7th. The billionaire has already announced that in order to have enough money to buy the social network, he sold part of his shares in Tesla and therefore has the originally agreed amount ready. However, the suit between him and the Twitter management is still ongoing.
What fate awaits Twitter
Shortly after it was announced that the purchase would eventually take place, the billionaire tweeted that "buying Twitter will accelerate the creation of X - app for everything". He hasn't shared any details yet, but a lot of things can be deduced even from this one sentence.
Before the start of the trial and during the initial considerations about the deal, he claimed that he wanted to transform Twitter into something better.
Buying Twitter is an accelerant to creating X, the everything app— Elon Musk (@elonmusk) October 4, 2022
With a political undertone, he also spoke about the fact that he wants to make the network more free in terms of the expression of its users and that he also plans to lay off employees quite a lot. In the past, he already praised the Chinese platform WeChat, which could be the model for the new Twitter in the form of "Western WeChat".
Twitter probably accelerates X by 3 to 5 years, but I could be wrong— Elon Musk (@elonmusk) October 4, 2022
Possible inspiration in Asia
China's WeChat is not just a social network with over a billion user base or a chat tool as the name might suggest. In fact, it is the so-called super application that, using widgets, provides a wide selection of activities that the user can perform in it. Whether it's reserving a table in a restaurant, lending money to a friend, chatting, playing games, or ordering a taxi, the super application makes it all possible.
"You basically live on WeChat in China because it’s so useful and so helpful to your daily life. And I think if we could achieve that, or even close to that with Twitter, it would be an immense success." https://t.co/Qs2AIeMjRY— Sarah Zheng (@_szheng) June 17, 2022
The world media is speculating that the visionary may have been inspired by this, and that his X app will be just like that. The parts of the puzzle fit together. In 1999, he founded X.com, which provided financial services, and later merged with Confinity to create PayPal. He sold this company to the giant eBay in 2002 for one and a half billion dollars in shares.
Today, the X.com domain is abandoned, but it is possible that E. Musk plans to restore it to its original purpose. He would suddenly have in hand two important elements for a new super application – a service for financial transactions and a social network. Since he plans to name the app X and has described it on Twitter as an all-in-one app, that scenario sounds likely.
Why is Musk suing Twitter?
It all started when the currently richest person in the world expressed interest in buying the social network Twitter, which he uses to communicate with his fans, in early spring 2022. When the process of the deal itself began, the visionary began to claim that the network did not give him truthful information.
According to him, it is not true that there are less than five percent spam bots and fake accounts on Twitter. However, the network insisted on this number, and the billionaire finally officially declared that he had lost interest in the purchase. Experts then confirmed that there could be several times more of these accounts on the network. Carnegie Mellon professor and computer scientist Kathleen Carley commented for the Washington Post at the time:
Whether it's covid, or elections in the US and other countries, bot numbers have often been higher. In different studies, the numbers of bots vary: we have seen 5 percent, but also 35 percent.
At the time, Musk accused Twitter of misleading investors with fake numbers, and relations soured.
Official and real reasons are not always the same
However, the real reason for withdrawing from the purchase was very likely that the shares of technology companies experienced a huge decline at the time, and this also affected Twitter. Since it was 44 billion US dollars, the management of Twitter decided to file a lawsuit against E. Musk for non-compliance with the contractually agreed terms from April 25, 2022.
The court date slowly approached, it was supposed to take place on October 17, but it seems that there will be no reason for it. After E. Musk failed to obtain an adjournment, Twitter management received a letter from the "Musk Group". It says that the billionaire changed his mind and will finally buy the network, under the originally agreed terms. This means that the purchase will count towards the original price of $54.20 per share. Immediately after this information became public, Twitter shares grew again by more than 22 percent.
The real reason behind another change in E. Musk's decision is also quite obvious this time. In the process, things like private messages or contacts would be exposed, which could be harmful to the business. Moreover, according to the rulings in the preliminary proceedings, he would not have much chance of winning in the trial, so the billionaire decided to include Twitter in his next plans.
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