Musk becomes media baron with Twitter deal amid Big Tech sell-off
Elon Musk has joined the elite club of social media barons after clinching a $44bn takeover of Twitter in the same week that investors wiped hundreds of billions of dollars from Big Tech valuations.
Musk’s drawn-out acquisition of Twitter, which he launched in April but attempted to abort in July, has closed just as a decade-long boom in the digital advertising that fuels social media grinds to a halt, bringing share prices crashing down across Silicon Valley.
As global financial markets nosedived this year, banks have been forced to stump up $12.5bn themselves to help finance Musk’s acquisition, part of more than $35bn worth of debt from a string of mega-takeovers that investors refused to finance, according to interviews and FT calculations.
Investors penalised the parent companies of Facebook and Google for what many saw as profligate spending on staffing and long-term research, such as Mark Zuckerberg’s “metaverse” initiatives.
“The big story here is the inability of Big Tech companies to manage their costs,” said David Older, head of equities at €33.2bn asset manager Carmignac, who owns positions in Amazon, Microsoft and Google. “These mega-cap tech companies have been talking about getting their costs in line and talking about a slowing macro backdrop but they just failed to act on it.”
This story originally appeared on: Financial Times - Author:Harriet Agnew
