THERE IS A lot that we don’t know about Elon Musk’s mammoth $44 (€41.2) billion deal to take Twitter private.

We don’t know, for example, exactly where he’s getting the $21 (€19.7) billion of his own fortune he plans to pony up for the purchase or if we can expect him to bring in partners.

We don’t really know (and neither do Twitter’s employees or even its chief executive, apparently) what sort of direction the Tesla chief executive plans to take the social media giant once the deal is finalised.

We don’t even know if the deal will be finalised with shareholders and — importantly for Musk, given his habit of thumbing his nose at them — regulators are still to weigh in on it (although all indications suggest he shouldn’t face too many issues on either front).

But what do we know about the bid that only a week ago seemed more like a pipedream or a trolling exercise than a serious possibility? What has Musk said about his vision for the social media platform and what do experts think is actually going to happen provided the agreement doesn’t fall apart in the interim?

How is Musk paying for it?

Having initially aggressively rebuffed Musk’s offer, Twitter’s board had a tough time fobbing him off after the South African-born businessman set out his financing plan last Thursday.

Those plans, contained in filings with the United States Securities and Exchange Commission, give us a good sense of how he’s funding the transaction.

Musk has linked up a team of banks to provide debt — including a €12.5 billion margin loan (a loan used to buy shares) secured against $62.5 (€58.6) billion worth of his Tesla shares — worth a total of $25.5 (€23.9) billion. Among his backers are the likes of Morgan Stanley, Barclays, Société Générale and Bank of America among others.

That’s the first piece of the puzzle. The second piece, worth €21 billion (€19.7) billion, is set to come out of his Musk’s own deep pocket.

The billionaire is worth an estimated €288.6 billion on paper. But despite enjoying a personal fortune that would make a pharaoh blush, there are still question marks hanging over this portion of the deal.

The lion’s share of Musk’s billions is tied up in Tesla shares and, according to Bloomberg at least, he may have as little as $3 billion available in cash and some liquid assets. Analysts believe he could still bring in partners on this side of the deal or else he may have to sell some of his stake in the auto-maker. 

What does he plan to do with the company?

It’s hard to say with any certainty. Even Parag Agrawal, Twitter’s current chief executive, seems to be in the dark about what it all means for the company’s direction.

Switching to a subscription model and introducing an edit button are two of the ideas Musk has floated in the past. Musk also released a statement last night, setting out a range of ideas. 

The self-described free speech “absolutist” said, “Free speech is the bedrock of and Twitter is the digital town square where matters vital to the future of humanity are debated.”

He added that he wants to ”unlock” Twitter’s “tremendous potential” by “enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans”.

But Musk, who has spoken out against Twitter’s content moderation policies, may find it difficult to loosen the platform’s rules in the current political and regulatory climate, experts believe. He may also have a hard time convincing advertisers it’s a good or even palatable idea.

Peter Vidlicka, media expert and co-founder of free public relations site Newspage, said that while the Musk deal could help Twitter “get its mojo back”, it could also cause conflict.

“We can expect fireworks in the months ahead,” he said.

To many, Musk’s purchase of Twitter will be seen as less a hostile takeover than a cultural stand, a reinforcement of free speech and a much-needed authentication of everyday people and their everyday views.

But he added, “Describing Twitter as a digital town square is an avuncular metaphor that doesn’t necessarily convey the mayhem that often unfolds there. It’s a digital town square, after kicking-out time.”

On the content moderation issue the European Commission, which has just unveiled new legislation aimed at holding social media companies accountable for harmful content, has already fired a shot across Musk’s bow.

“Whether on online harassment, the sale of counterfeit products… child pornography, or calls for acts of terrorism… Twitter will have to adapt to our European regulations which do not exist in the United States,” EU commissioner Thierry Breton told AFP.

No matter the shareholders, Twitter will from now on have to totally adapt to European regulations,” said Breton, who handles the EU’s industrial policy portfolio and was a key backer of the new laws.

“The law will now be very clear, much clearer in Europe than in the United States, with more rules in Europe than in the United States. 

What’s next?

There are still a couple of hurdles for Musk to clear in his takeover bid.

For one, Twitter’s shareholders will have to actually approve the deal, which will see them paid $52.40 (roughly €51) per share that they own. That’s about 38% more than they would have received if they sold their shares just before Musk publicly disclosed his shareholding in the company in early April. It’s also about 21% more than Twitter’s average share price throughout the early months of the year.

In other words, it’s a serious and potentially lucrative offer and all indications seem to be that they will approve it, possibly at Twitter’s annual general meeting on 25 May.

The takeover will also be scrutinised by US regulators like the Federal Trade Commission to see whether it raises any issues around competition. That seems unlikely given that Musk isn’t acquiring a competitor 

There is also the possibility that the deal falls apart for some reason in the interim if, for example, part of the financing were to fall through. In that event, Bloomberg reported yesterday, Musk would likely be on the hook for billions of dollars in ‘break fees’, otherwise known as failure costs.

— Additional reporting by PA and © AFP 2022