When you’re a heroic billionaire who helped finance the most controversial tech acquisition of the decade, you may want to remind individuals about it.
Changpeng “CZ” Zhao, founder and former CEO of Binance, did precisely that. He posted a screenshot, displaying an article about Binance throwing in $500 million to assist Elon Musk buy Twitter (now X), and captioned it with a assured, “Happy to have contributed to the cause.”
The response from Elon was: “Thanks!”
The $44 billion journey: From shareholder to proprietor
Elon’s highway to proudly owning Twitter was something however clean. It began in April 2022, when Elon turned Twitter’s largest shareholder by buying a 9.1% stake. Shortly after, he made an unsolicited provide to buy the complete firm for $44 billion, pricing the inventory at $54.20 per share.
The reasoning? Elon claims he needed to remodel Twitter right into a haven without cost speech, claiming the platform had fallen sufferer to extreme censorship.
But issues bought unhealthy quick. Elon tried to again out of the deal, citing issues over spam accounts. Twitter’s board wasn’t having it and dragged Elon into courtroom. After months of authorized drama, Elon gave in and finalized the acquisition on October 27, 2022.
The price ticket? $44 billion. And let’s be clear, many thought it was an insane overpayment for a platform struggling to keep related. But not CZ, evidently.
Chaos reigns at Twitter (or X, should you favor)
The second Elon walked into Twitter’s headquarters carrying a sink, it was clear this wasn’t going to be enterprise as regular. One of his first strikes was to fireplace half the workforce, together with complete departments like content material moderation and promoting gross sales.
Critics accused him of gutting the firm’s infrastructure. Supporters referred to as it needed streamlining. Elon additionally rolled out main adjustments to the platform’s content material insurance policies. He promised a freer, extra open platform.
What many customers bought as an alternative was a rise in hate speech and misinformation. Advertisers, the lifeblood of Twitter’s income mannequin, began fleeing. A survey revealed solely 4% of advertisers felt X (the rebranded Twitter) was a protected place for his or her manufacturers. The outcome? A large dip in advert income.
Financially, issues went from unhealthy to worse. By late 2024, X’s valuation had plummeted to round $15 billion—down practically 80% from the $44 billion Elon shelled out. Fidelity analysts argued that Elon had overpaid from the begin, estimating Twitter’s precise worth at the time of buy nearer to $30 billion.
Add to that over $1 billion in annual curiosity funds on loans taken to finance the deal, and Elon’s acquisition was shaping up to be a monetary nightmare.
Who all bankrolled Elon’s X gamble?
Elon didn’t pull $44 billion out of skinny air. He relied on a mixture of his personal wealth, financial institution loans, and backing from high-profile buyers. Binance’s $500 million was only one piece of the puzzle.
Oracle co-founder Larry Ellison was one other main contributor, as was Prince Alwaleed bin Talal, who retained his stake in Twitter. Former CEO Jack Dorsey additionally joined the listing of backers, investing by way of a non-public entity.
Big-name enterprise capital companies jumped in too. Andreessen Horowitz, Sequoia Capital, and Gigafund all pitched in important sums. Even alleged pedophile and intercourse offender Sean “Diddy” Combs made the listing, investing by way of Sean Combs Capital, one thing Elon is consistently criticized for.
The eccentric billionaire additionally offered billions price of Tesla inventory to finance the deal, a transfer that didn’t sit nicely with Tesla buyers. He secured roughly $12.5 billion in loans from banks, together with senior secured loans and subordinated debt.
This financing construction left X with large debt obligations that proceed to weigh closely on its funds. Elon’s purpose now’s to flip X into an “everything app,” comparable to China’s WeChat. But executing that imaginative and prescient has confirmed to be something however clean. And he retains including on to his duties together with his current involvement in the incoming US presidential administration.
User engagement has been a blended bag. Some metrics present resilience, whereas others point out declining exercise due to coverage adjustments and an increase in poisonous content material. Elon himself acknowledged the challenges, admitting the buy introduced him “mega pain” however insisting it was needed for humanity to take the “good fork in the road.”
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