The big questions about what happens next in Elon Musk’s bid for Twitter.

Over the vacation weekend, Twitter’s board put in place a poison capsule provision in an effort to dam Elon Musk, who desires to purchase the social media platform. The maneuver, which might make it tougher and costly for Mr. Musk to amass shares with out the approval of the board, will give Twitter’s administration time to evaluate the supply and doubtlessly invite different consumers by way of a sale course of.

Not less than one personal fairness agency, Thoma Bravo, is , although it’s unclear whether or not that may end in a proper supply. There are additionally different actions Mr. Musk can take to outmaneuver Twitter’s reluctant board. Twitter’s inventory was up greater than 2 % premarket forward of the primary buying and selling session for the reason that poison capsule was introduced.

Within the meantime, the DealBook publication mentioned a number of the main questions that stay about Mr. Musk’s pursuit of Twitter:

Will Mr. Musk go hostile?

He seems to be threatening it; at the least, that’s what his tweet quoting Elvis Presley’s “Love Me Tender” appears to suggest. In a young supply, also referred to as a hostile bid, Mr. Musk would go on to shareholders, asking them to “tender” their shares at a given worth (his supply is $54.20 a share, for now). This may require him to file a kind with the Securities and Trade Fee that, amongst different issues, offers particulars in regards to the financing behind his bid. That’s vital, as a result of questions stay about how Mr. Musk would get the money to pay for a Twitter deal.

Keep in mind that Mr. Musk continues to be coping with the authorized fallout over the claims he made about funding for his failed bid to take Tesla personal in 2018.

May a hostile bid override Twitter’s poison capsule?

No, however it might put strain on Twitter’s board to take away the protection, if sufficient shareholders help Mr. Musk’s bid. In 2012, for instance, CVR Vitality eliminated a poison capsule it had put in place to thwart the activist investor Carl Icahn after his tender supply earned widespread help.

What’s Twitter value?

A number of analysts mentioned that they thought Mr. Musk’s bid was too low and that the board was solely more likely to settle for a proposal of $60 per share or extra. However that’s partially based mostly on Twitter’s capacity to succeed in lofty monetary targets in 2023: 315 million customers and $7.5 billion in income, up from 217 million customers and $5.1 billion in income in 2021.

Twitter’s inventory rose above $70 per share when it introduced these targets final 12 months however has since fallen to round $45, as traders questioned the corporate’s capacity to satisfy its targets and fend off competitors from different social media websites. Administration stays assured: “Our technique and our targets for 2023 that we shared a few 12 months in the past are usually not altering,” Parag Agrawal, Twitter’s chief govt, mentioned in February.

What’s an “uncensored” Twitter value?

That’s even tougher to say. Mr. Musk has instructed that he would promote extra “free speech” on the platform, however Twitter insiders level to stalled consumer progress in 2016, earlier than the corporate tightened up content moderation, as a warning.

“They’ve gotten customers to develop meaningfully over the previous couple of years,” Wealthy Greenfield, a media business analyst at LightShed Companions. “To make the platform chaos, I believe, goes to make customers go within the unsuitable course.”

Will different consumers step in?

Perhaps. Antitrust considerations would most likely make it onerous for a lot of company consumers, particularly within the tech business. It’s a large test for personal fairness, far surpassing final 12 months’s $30 billion take-private of Medline, the most important leveraged buyout in additional than a decade. Twitter’s restricted free money circulation additionally makes it much less engaging to finance with loads of debt.