While you’re a heroic billionaire who helped finance probably the most controversial tech acquisition of the last decade, you would possibly wish to remind folks about it.
Changpeng “CZ” Zhao, founder and former CEO of Binance, did precisely that. He posted a screenshot, exhibiting an article about Binance throwing in $500 million to assist Elon Musk purchase Twitter (now X), and captioned it with a assured, “Pleased to have contributed to the trigger.”
The response from Elon was: “Thanks!”
The $44 billion journey: From shareholder to proprietor
Elon’s highway to proudly owning Twitter was something however clean. It began in April 2022, when Elon grew to become Twitter’s largest shareholder by buying a 9.1% stake. Shortly after, he made an unsolicited supply to purchase your complete firm for $44 billion, pricing the inventory at $54.20 per share.
The reasoning? Elon claims he needed to rework Twitter right into a haven without spending a dime speech, claiming the platform had fallen sufferer to extreme censorship.
However issues received dangerous quick. Elon tried to again out of the deal, citing issues over spam accounts. Twitter’s board wasn’t having it and dragged Elon into courtroom. After months of authorized drama, Elon gave in and finalized the acquisition on October 27, 2022.
The worth tag? $44 billion. And let’s be clear, many thought it was an insane overpayment for a platform struggling to remain related. However not CZ, evidently.
Chaos reigns at Twitter (or X, for those who choose)
The second Elon walked into Twitter’s headquarters carrying a sink, it was clear this wasn’t going to be enterprise as normal. Certainly one of his first strikes was to fireside half the workforce, together with complete departments like content material moderation and promoting gross sales.
Critics accused him of gutting the corporate’s infrastructure. Supporters known as it essential streamlining. Elon additionally rolled out main adjustments to the platform’s content material insurance policies. He promised a freer, extra open platform.
What many customers received as a substitute was a rise in hate speech and misinformation. Advertisers, the lifeblood of Twitter’s income mannequin, began fleeing. A survey revealed solely 4% of advertisers felt X (the rebranded Twitter) was a protected place for his or her manufacturers. The outcome? A large dip in advert income.
Financially, issues went from dangerous to worse. By late 2024, X’s valuation had plummeted to round $15 billion—down practically 80% from the $44 billion Elon shelled out. Constancy analysts argued that Elon had overpaid from the beginning, estimating Twitter’s precise worth on the time of buy nearer to $30 billion.
Add to that over $1 billion in annual curiosity funds on loans taken to finance the deal, and Elon’s acquisition was shaping as much as be a monetary nightmare.
Who all bankrolled Elon’s X gamble?
Elon didn’t pull $44 billion out of skinny air. He relied on a mixture of his personal wealth, financial institution loans, and backing from high-profile buyers. Binance’s $500 million was only one piece of the puzzle.
Oracle co-founder Larry Ellison was one other main contributor, as was Prince Alwaleed bin Talal, who retained his stake in Twitter. Former CEO Jack Dorsey additionally joined the listing of backers, investing by way of a non-public entity.
Massive-name enterprise capital corporations jumped in too. Andreessen Horowitz, Sequoia Capital, and Gigafund all pitched in vital sums. Even alleged pedophile and intercourse offender Sean “Diddy” Combs made the listing, investing by way of Sean Combs Capital, one thing Elon is continually criticized for.
The eccentric billionaire additionally offered billions price of Tesla inventory to finance the deal, a transfer that didn’t sit properly with Tesla buyers. He secured roughly $12.5 billion in loans from banks, together with senior secured loans and subordinated debt.
This financing construction left X with huge debt obligations that proceed to weigh closely on its funds. Elon’s objective now’s to show X into an “all the things app,” just like China’s WeChat. However executing that imaginative and prescient has confirmed to be something however clean. And he retains including on to his tasks along with his latest involvement within the incoming US presidential administration.
Person engagement has been a combined bag. Some metrics present resilience, whereas others point out declining exercise resulting from coverage adjustments and an increase in poisonous content material. Elon himself acknowledged the challenges, admitting the acquisition introduced him “mega ache” however insisting it was essential for humanity to take the “good fork within the highway.”
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