Billionaire Elon Musk says he is ready to buy twitter again for his original offer after months of trying to back out of the deal.
Cheddar News speaks with Angelo Zino, Senior Equity Analyst at CFRA Research, about why Musk made the surprise U-turn and how his ownership could change the social media platform.


Will Elon Musk Really Buy Twitter?

Welcome back to closing bell on cheddar news in a surprise reversal this week, billionaire Elon musk said he will buy twitter. He now says he's willing to pay the price he offered months ago before trying to back out of the deal contingent on debt financing and an end to the legal fight where twitter was going to force me, must go through the deal they agreed to earlier this year. The news came out just weeks before the two sides were due in court. So joining me now to break down all the legal drama is Angelo Zino, he's senior equity analyst at C. F. R. A research. So Angelo, why do you think musk changed his mind again? Yeah, I mean, it's, it's hard to, to know what musk is thinking at any point in time, right. But you kind of think about this, I, I don't really necessarily think anything changed significantly. I think as you kind of just started getting closer to the actual trial date, you know, on october 17th as well as the fact that he was supposed to get deposed. Um, I think he just got to the point into the realization that odds of a victory was essentially slim to none to be honest with you and um, you know, that we're also going to be, you know, other kind of fellow musk, um, you know, equity investors out in there in the likes of Ellison and what have you, um, that would have also had to get deposed. So I think at the end of the day, he just kind of said, all right, well, I'm gonna have to own this this asset long over time anyway, I might as well just own it now and kind of just avoid some kind of ugly court trial to be honest with you. So we're here now and I think ultimately one way or another, he is going to own this asset here in the coming weeks now, let's take you back all to april when must sit at a conference that he planned to allow all forms of speech on twitter. Let's take a listen to exactly what he said back then. We wanted to really have like the perception and reality that speech is as free as reasonably possible and a good sign as to whether there's free speech is uh is is someone you don't like allowed to say something you don't like and if that is the case then we have free speech and it's it's damn annoying when someone you don't like says something you don't like that is a sign of a healthy functioning uh free speech situation. Okay, so it's fast forward to today. What do you think musk will actually chew with twitter when he actually owns it? Yeah, so I mean, I mean you just kind of listen to that. I mean content moderation is definitely something he's going to look to focus on, right? Um It's something kind of I think was part of his vision when he originally kind of came up with the idea of of buying twitter, so um you know, whether it be kind of bringing the likes of individuals like donald trump back onto the platform, which we expect fully expect to happen, um but ultimately, you know, I think this is kind of um you look at the platform here and um about 90% of the revenue here is advertising driven. His ultimate goal here is, is to get about half of it ad driven, half of its subscription base driven, and I think there's just a lot of work to be done here on the content moderation side of things, listen, regulators are going to be all over him and it becomes a lot more difficult to kind of execute on that side of things. Maybe some of the divisions that he has with regulators kind of in the line, once he's in the actual limelight there, so I don't know how successful he is there, but listen, the focus here is, you know, clearly monetizing that platform, it's something that twitter has been unable to do here over the last decade since it's been a publicly traded company. Um but I think part of his, um you know, part of his belief is to turn this into more of a subscription, the type of business, put more capabilities on the form, um you know, his kind of Wechat, Wechat type of super chat kind of vision out there, potentially kind of having this social media, instant messaging type of, you know, mobile payments type of platform all into one I think is another part of his vision where he can kind of throw crypto in there as well. So I think there's a lot that, that's out there. What his actual vision I think remains to be seen Now. I think this deal is still contingent on some debt financing and if I understand the reports writes about $13 billion. So who is going to provide that capital at this time? Yeah, so you're right. I mean it's a $44 billion 13 billion on the side on the debt side of things. So you're looking at Morgan Stanley and um, Bank of America on that side of things. And clearly there's been some concerns here in recent days about the, the actual financing aspect of it. And you know, the big reason for it is, you know, the death side of things, obviously interest rates have gone up significantly since the announced offer. And then of course, on the equity side of things, I mean, we've kind of seen, um, you know, just evaluations absolutely get destroyed on the social media, on the social media names out there, which is a big reason why must didn't want to kind of buy the stock at $54 because it's probably worth about half of that on a standalone basis right now. So there have been concerns on both side of things. We think ultimately this deal does get done. There's no reason for on the dead side of things to really kind of walk away from this. I mean, you do want to kind of have been the good graces of Elon must really, in our view, because over time there is a lot musk has to offer in terms of the likes of a SpaceX I. P. Oh, among other things. So there's no reason to be honest with you why this deal shouldn't go through from the financing side of things. I think a lot of people are crossing their fingers on that on both sides. So thanks to Angelus, you know, he's a senior equity analyst at CFR, a research