(Bloomberg) – In the hours before the completion of the acquisition of Twitter Inc. worth $44 billion, Elon Musk said he bought the social media platform to help humanity, not to make more money.
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Indeed, by closing the deal, the world’s richest man, who now calls himself “Chief Twit,” raked in an instant $10 billion worth of his net worth, according to the Index’s calculations. Billionaire Bloomberg.
Musk, 51, has spent at least $25 billion working on a deal since April to buy Twitter for $54.20 a share, assuming he keeps outside investors, who pledged $7.1 billion for the deal.
But six months after Musk announced he would buy the company, his offer looks expensive. Shares of social media companies fell as economic uncertainty and rising interest rates curbed market speculation and advertiser spending.
The Solactive Social Media Index, which tracks the performance of publicly traded social media companies, is down nearly 40%. Bloomberg’s wealth index led to a similar drop in the value of Twitter, and thus Musk’s shares.
Other colleagues are even worse. Shares of Meta Platforms Inc., the owner of the Facebook and Instagram networks, are down 53% since Musk made an offer for Twitter in April, leaving CEO Mark Zuckerberg’s fortune down more than $100 billion compared to the year before. with the peak period. Snap Inc. grew 70% during this period, wiping out the wealth of its co-founders.
Musk isn’t the only successful Twitter investor. Company co-founders Jack Dorsey and Prince Alwaleed Bin Talal al Saud have backed the takeover and are said to remain investors in the company. Their estimated net worth fell by $380 million and $640 million, respectively.
Withdraw money
Downside: For Twitter investors making money, Musk’s deal is a big win. Not only did they get a 20% premium when Musk made the offer private, they also avoided a stock price drop that affected rival social media giants.
It was also a headwind for some of Twitter’s outgoing executives to share about their severance and around $100 million in payments. About half will go to Parag Agrawal, the former CEO.
Musk spent several months trying to undo the bid on Twitter. In July, he said he was terminating his contract because he misunderstood the popularity of bots online. After Twitter sued to force him to close the deal, the parties took each other to court. In the end, Musk agreed to continue with the original offer.
The $10 billion hit to Musk’s fortune brings his total loss this year to $66 billion, according to the Bloomberg wealth index, according to Bloomberg’s wealth index.
Shares of Tesla Inc., his most valuable asset, are down 35% this year, in part due to fears he will sell shares of the electric vehicle maker to fund his Twitter purchase. Musk used all of his existing liquid assets to complete the Twitter acquisition, and his estimated debt has increased by $4.6 billion, according to a Bloomberg index.
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