Twitter Acquisition Nears End of '6-Month Controversy'... Musk Says "Twitter Can't Become Hell" (Comprehensive)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin, New York=Special Correspondent Jo Seulgina] The deadline for Elon Musk, CEO of Tesla, to complete his acquisition of the social networking service (SNS) Twitter is just one day away on the 28th (local time). Since the acquisition agreement announcement in April, the process has been fraught with cancellations and reversals, and the market is closely watching with tension to see if this six-month tumultuous process can be successfully concluded.

On the 27th, Musk seemed to prepare for the post-acquisition period by reassuring advertisers, emphasizing freedom of expression while noting that Twitter, a core business centered on advertising revenue, "cannot become a free-for-all hellscape."

◆ Musk Reassures Advertisers... Denies Layoff Reports to Employees

On the same day, Musk posted an open letter to advertisers on his Twitter account. This came just a day after he shared a photo of himself carrying a sink into Twitter's San Francisco headquarters.

In the letter, Musk stated, "There has been much speculation about why I am buying Twitter and what I think about advertising, most of which is incorrect," adding, "The reason I acquired Twitter is because having a shared digital town square is important for the future of civilization." He also emphasized that while there are significant concerns that current SNS platforms cause hatred and social division, Twitter can "enable broad discussions in a healthy way without relying on violence."

Musk explained, "Twitter clearly cannot become a hellscape of free-for-all brawling," and "Our platform must be a warm and welcoming place while complying with the law." He added, "I want Twitter to be the world's best advertising platform that strengthens your brand and helps businesses grow."

[Image source=Reuters Yonhap News]

This letter came after Musk repeatedly emphasized freedom of expression during the Twitter acquisition process. Although he has not disclosed specific operational policies for Twitter, concerns have grown among some advertisers that hate content on Twitter could surge. Since advertising accounts for 90% of Twitter's revenue, Musk appears to be trying to calm market anxieties by assuring that Twitter will remain a healthy cyberspace even under his ownership.

Musk also visited Twitter's San Francisco headquarters the previous day to ease employees' concerns. According to Bloomberg and other sources, he met with employees at the headquarters' coffee bar and denied media reports about laying off 75% of the staff. Earlier, The Washington Post (WP) and Bloomberg reported that Musk had told investors he planned to lay off 75% of Twitter's approximately 7,500 employees, reducing the workforce to around 2,000.

◆ It's Not Over Until It's Over... Market 'Closely Watching'

Musk's messages bolster expectations that the Twitter acquisition scheduled for the 28th will be completed. According to a court order, Musk must finalize the $44 billion acquisition by purchasing Twitter shares at $54.20 per share (approximately 77,000 KRW) by 5 p.m. on the 28th. After announcing the acquisition agreement in April, he declared the deal void in July citing fake and spam accounts, but three months later in October, he withdrew the cancellation and said he would proceed as planned.

Throughout this process, the market has been watching closely, saying "it's not over until it's over," until the acquisition is finalized. Usually, investor attention wanes after an acquisition agreement is signed, but this deal has drawn attention due to legal disputes. Bloomberg and The Wall Street Journal (WSJ) reported, citing sources, that some investors had already transferred funds to support Musk's acquisition financing as of the previous day.

[Image source=AP Yonhap News]

The New York Stock Exchange (NYSE) confirmed that trading of Twitter shares will be temporarily suspended on the acquisition day, the 28th, to protect investors. Securities authorities can suspend trading of specific stocks for up to 10 business days under securities laws to protect investors and the public interest.

If Musk does not complete the acquisition as planned, a lawsuit will proceed immediately from November. However, experts believe Musk's chances of winning such a lawsuit are slim. Bloomberg reported that Judge Kathaleen McCormick of the Delaware Court of Chancery, who is overseeing the case, has shown an unfriendly stance toward Musk in previous rulings related to evidence. Brian Quinn, a professor at Boston College, said, "In my view, there is a 99% chance this deal will go through," adding, "All signs indicate Musk is accepting his fate."

Once Musk finalizes the acquisition, market attention is expected to shift to changes at Twitter. Bloomberg, citing multiple sources, reported that Musk plans to list a new Twitter holding company within the next 3 to 5 years. Additionally, since Musk has emphasized freedom of expression and indicated he would lift restrictions on former U.S. President Donald Trump, the operational policies he will announce are expected to receive significant attention. Furthermore, as Twitter's profitability and efficiency issues continue to surface, cost-cutting measures are also expected to be announced.

As the scheduled acquisition date approaches, Twitter's stock closed up 0.66% at $53.70. Twitter's stock price, which had fallen to the $32 range in July when Musk declared the deal void, fluctuated before recovering to the $50 range after Musk withdrew the cancellation in October. The gap between Twitter's stock price and Musk's acquisition price has now narrowed to less than $1.

This content was produced with the assistance of AI translation services.