Elon Musk sells $ 3.95 billion worth of Tesla stock after taking over Twitter which cost 11 times that amount. Twitter is losing advertisers, money, and possibly users

Elon Musk sold Tesla shares worth nearly $ 4 billion after acquiring Twitter, the social media platform that’s losing advertisers, money, and possibly users. Musk sold 19.5 million shares of the electric car maker between November 4 and November 8, according to the company’s latest regulatory filings with the SEC. The billionaire’s goal with the $ 3.95 billion raised from his Tesla stock sale has not been specified, but observers believe Musk should sell Tesla stock to help finance the $ 44 billion he will sell. he has disbursements for Twitter.

To settle the account of the Twitter acquisition, Elon Musk has put some of his personal assets on the table, supplemented by investment funds and other large fortunes, as well as bank loans.

Initially, the Tesla boss only wanted to spend about $ 15 billion of his own money on the operation. A significant portion of the package, $ 12.5 billion, was to come from loans backed by his Tesla stock, which prevented him from selling them. But in the end he decided to offer more cash and forgo the loan. In two waves, in April and August, he sold shares in the electric car maker worth about $ 15.5 billion.

It will therefore pay just over $ 27 billion directly. Note that he entered the capital earlier this year and already controls 9.6% of Twitter after buying shares on the market. Add to this about $ 5.2 billion in investment funds and large fortunes, most notably co-founder of Oracle software publisher Larry Ellison, who signed a $ 1 billion check, or Qatar Holding, a subsidiary from the sovereign wealth fund of Qatar, the Qatar Investment Authority.

Cryptocurrency exchange Binance is also on this list of investors with a contribution of $ 500 million. “We are thrilled to be able to help Elon bring a new vision to life for Twitter,” Binance CEO Changpeng Zhao said in a statement. In exchange for their investment, everyone will receive stock and become Twitter shareholders. This group is completed by Saudi prince Al-Walid ben Talal, who brought Elon Musk the nearly 35 million shares he already held.

The balance, or 13 billion dollars, is provided by bank loans, issued by a group of institutions including Morgan Stanley, Bank of America, the Japanese Mitsubishi UFJ Financial Group and Mizuho, ​​Barclays and the French Socit Gnrale and BNP Paribas. . According to documents disclosed to the US Securities and Exchange Authority, the SEC, Morgan Stanley alone lends about $ 3.5 billion.

I hope it was worth it.

A tumultuous start under his new boss

Elon Musk split from the management team, including chief executive Parag Agrawal, chief financial officer Ned Segal, and head of legal policy Vijaya Gadde, firing about half of the 7,500 employees.

Musk previously said he wanted to use the Twitter acquisition to help humanity by making Twitter a bastion of free speech and the center of people’s lives. The first weekend under Musk’s ownership saw Twitter’s chief security officer feel the need to remind users of the rules that prohibit hate speech.

Over the past 48 hours, we’ve seen a small number of accounts post a lot of tweets containing insults and other derogatory terms. To give you an idea of ​​scope *: More than 50,000 tweets that repeatedly use a particular insult came from just 300 accounts, Yoel Roth said.

Twitter previously suspended celebrity freewheeling accounts that sometimes sowed seeds of hatred and division. Among them was a certain former American president.

Advertisers want to see how Musk balances things and a slew of large companies including Adidas, Puma, Hugo Boss, Audi of America, Volkswagen, German insurer and asset manager Allianz, automaker Stellantis, and automaker ‘Oreo Mondelez. they have decided to remove their ads from Twitter.

“What we have seen recently since the change was announced on Twitter is that the number of hate speeches is increasing significantly,” Mondelez International chief Dirk van de Put said. We felt there was a risk that our ad would appear next to the wrong messages, ”he added.

Musk said late last week that Twitter was losing $ 4 million a day, which apparently forced him to lay off some 3,750 Twitter employees, even though the company would backtrack and ask dozens to come back, with some fired. by mistake and the experience of others required to achieve Elon Musk’s goals.

877,000 accounts deactivated and 497,000 suspended, according to Bot Sentinel

According to Bot Sentinel, a company that analyzes over 3.1 million Twitter accounts and their daily activity, approximately 877,000 accounts were deactivated and 497,000 suspended between October 27 and October 1.uh November. It was more than double the usual number. “We have seen an increase in people deactivating their accounts and also suspending Twitter accounts,” said Christopher Bouzy, founder of Bot Sentinel.

Bouzy and Bot Sentinel came up with their numbers by looking at the percentage of users they analyze who deactivated their accounts or were suspended after Musk took over Twitter, then applying that percentage to Twitter’s overall user base, which currently stands. about 237 million “loadable”. active users daily.

From 27 to 1 Octoberuh In November, Bot Sentinel found that 11,535 accounts they were monitoring had been deactivated, meaning someone chose to close an account. Another 6,824 have been suspended, which happens when Twitter proactively removes accounts due to inactivity, inauthenticity or violation of the site’s rules. This represents approximately 0.59% of the accounts monitored by Bot Sentinel. In the week prior to Musk’s purchase of Twitter, only 5,958 accounts were deactivated or suspended, suggesting a 208% increase in account losses in the days following the purchase.

“We believe that the increase in deactivations is the result of people upset that Elon Musk is buying Twitter and has decided to deactivate their accounts in protest,” Bouzy said, pointing to anecdotal evidence from people posting about the site’s abandonment. .

Manoel Ribeiro, an academic from EPFL Lausanne in Switzerland who studies niche internet communities, including the alt-right and how they are influenced by moderation policies and algorithms, agrees. There really seems to be an attempt by many to migrate to other platforms, such as Mastodon, he pointed out.

Bouzy thinks the increase in the number of account suspensions is partly due to hate speech by a section of the user base testing what they can and cannot say about the site now that it is under control. the suspensions are due to Twitter taking action against accounts that deliberately violate Twitter’s rules to see if they can push the boundaries of “free speech,” she said. It is unclear what percentage of those suspended by Twitter were deemed inauthentic (i.e. bots) instead of violating the platform’s rules on acceptable speech.

A separate analysis from the Network Contagion Research Institute, a research group, shows that the use of the N word on Twitter increased by nearly 500% in the 12 hours following Musk’s announcement that the deal was closed. At the same time, various examples of derogatory “copypasta” (blocks of text copied and pasted into messages, popular with users of message boards like 4chan) were published with impunity.

The rise of hate speech comes as the company has blocked access to content moderation tools for much of its trust and security team. Only 15 people then had access to tools that allow them to delete publications; hundreds usually have this capability. Yoel Roth, Twitter’s head of security and integrity, tweeted that this was “planned as part of the company’s transition to reduce internal risk opportunities.” The platform also has automated moderation tools that work alongside human moderators, Ribeiro points out.

But Twitter notices an explosion in its traffic

However, according to Elon Musk’s public claims, Twitter usage is at the highest level lol. He also added it, I just hope the servers don’t fail!

Musk also tweeted a chart showing Twitter’s monetizable daily active users (mDAUs) have grown rapidly from 240 to 255 million since July, while US mDAUs have grown by three million.

This metric reflects the number of logged in users who see the ads on Twitter. When Twitter launched its $ 2.99 / month per user Twitter Blue last November (which Musk has now increased to $ 8), it said it was aiming for 315 million mDAUs in the fourth quarter of 2023, up from 152 million. of mDAU in the fourth quarter of 2019. Twitter therefore hoped to double its annual revenue from $ 3.7 billion in 2020 to over $ 7.5 billion in 2023.

News of a wave of racist and hate-filled tweets following its acquisition initially frightened advertisers, although Twitter later claimed the influx was due to coordinated trolling campaigns. Monday’s FAQ for Advertisers says hate speech levels remain within historical norms, accounting for 0.25% to 0.45% tweets per day out of hundreds of millions.

Meanwhile, Musk’s elimination of Twitter management, coupled with the resignation of its CEO, Sarah Personette, has left advertisers wondering who to voice their concerns. The FAQ was shared on Twitter on Monday by Alex Josephson, who has already dedicated 10 years of his life to business and is currently vice president of Twitter Next, a team that has been helping brands create social media campaigns since 2019. His message to the sales team notes that 25% of the organization was affected by Musk’s mass layoffs on Friday, and that the decision to reduce our presence in certain geographic areas contributed significantly to the reduction in sales.

Another concern among advertisers is Elon Musk’s tweets, including his now-deleted tweet that amplifies a conspiracy theory about the violent attack on Paul Pelosi.

Source: Tesla SEC filing

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