After lengthy back & forth, Elon Musk has finally agreed to purchase Twitter for $44 Billion Dollars & take Twitter private.
Twitter generated $5 billion in revenue in 2021, a 35% increase on 2020 figures and a significant improvement on the 8% and 13% increase the two years before. Most of that revenue came directly from “Twitter Advertising“
Elon Musks Plan For Twitter
Elon Musk has planned to roll out several features on Twitter to start generating some money. The initial rollout is to charge $8 a month all its “VERIFIED” Users who must purchase “Twitter Blue” if they wish to keep their verification badge, which offers some benefits like being able to edit tweets and ad-free access to news articles. Elon also wants to make it easier for people to get verified, which loses the entire point of verification.
Even if all the verified users paid the $8, it would not bring any significant amount of revenue, but it’s better than nothing. In order for Twitter to actually increase its revenue, it has to focus on making advertising easier and offer more placements for advertisers.
Elon plans to bring back the “vine”, which is pretty much what TikTok is because this would bring the young users base back on Twitter.
He reportedly has also discussed the possibility of “article publishing” on Twitter. ( Kind of like what Medium Is ), which would give Advertisers more placements to run their ads on.
Will Twitter Go Public Again?
That is a real possibility. Elon Musk might take the company public again within the next 3 years after he has revamped the platform.
Who Is Financing The Twitter Deal?
Twitter’s acquisition is financed with 13$ Billion Via debt from Banks, while the rest of is from various VC Firms including Saudi Arabian investor Prince Alwaleed bin Talal who owns the second largest shares after Elon Musk.
Twitter Acquisition Financing Detail
|Joint loan arrangers||$13 billion debt financing package|
|Bank of America|
|$6.5 billion term loan facility|
$500 million revolving loan facility
$3 billion secured bridge loans
$3 billion unsecured bridge loans
|Equity Investor||Description||Equity Commitment|
|A.M. Management & Consulting||–||$25 million|
|AH Capital Management||VC firm founded by Marc Andreessen and Ben Horowitz||$400 million|
|Aliya Capital Partners||SpaceX investor||$360 million|
|BAMCO||Investment adviser||$100 million|
|Binance||Cryptocurrency firm||$500 million|
|Brookfield||Canadian investment firm with over $690 billion assets under management||$250 million|
|DFJ Growth IV Partners||Tesla, SolarCity, SpaceX and The Boring Company investor||$100 million|
|Fidelity Management & Research Company||Acts as the investment advisor to Fidelity’s family of mutual funds||$316 million|
|Honeycomb Asset Management||Private investment firm led by Chief Investment Officer David Fiszel||$5 million|
|Key Wealth Advisors||$30 million|
|Lawrence J. Ellison Revocable Trust||Oracle co-founder Larry Ellison’s trust||$1 billion|
|Litani Ventures||Chicago-based VC firm||$25 million|
|Qatar Holding||Investment house founded by Qatar Investment Authority||$375 million|
|Sequoia Capital Fund||Invested in The Boring Company||$800 million|
|Strauss Capital LLC||–||$150 million|
|Tresser Blvd 402 LLC (Cartenna)||–||$8.5 million|
|VyCapital||Invested in The Boring Company||$700 million|
|Witkoff Capital||New York-based real estate tycoon Steven Witkoff’s firm||$100 million|
|Saudi Arabian investor Prince Alwaleed bin Talal||Twitter investor|