Billionaire Elon Musk completed a $44 billion buyout of social media platform Twitter in 2022, a move that was done to help him get closer to creating an everything app.
If Musk should choose to take Twitter public again in the future, he may be closer to securing his likely preferred stock ticker.
What Happened: A proposed buyout of a leading steel company could have implications on Musk’s plans for his X company and the potential to take the company public someday in the future.
Cleveland-Cliffs Inc CLF proposed the acquisition of United States Steel Corporation X earlier this week.
The proposed buyout called for United States Steel shareholders to receive $17.50 per share in cash and 1.023 shares of Cleveland-Cliffs stock, which represented around $35 per share. The proposed acquisition was turned down by the company.
United States Steel said the acquisition offer was “unreasonable.” The company announced it is exploring strategic alternatives after “receiving multiple unsolicited proposals” that included the sale of production assets and the whole company.
The steel company has invited Cleveland-Cliffs to participate in the strategic review process.
While a sale of United States Steel may or may not happen, it could prove important to the future of the social media platform Twitter, which is now known as X.
Musk’s Love of X: For years, Musk has been fascinated with X and it is now the name of the social media platform he bought. In 1999, Musk founded X.com, a financial company he hoped would be a place for banking, checking, credit cards, investments and digital purchases.
Musk biographer Walter Isaacson recently shared more on Musk’s love of X and the early creation of the company.
Isaacson said Musk made the remark, “If you fix all the reasons why a consumer would take money out of the system, then it will be the place where all the money is, and that would make it a multitrillion-dollar company.”
X.com merged later with Confinity, a company co-founded by Peter Thiel, and formed what is now PayPal Holdings Inc PYPL. Reports said Musk wanted to keep the X.com name.
Twitter recently rebranded to X, a move that saw mixed reactions from investors, analysts and users of the social media platform.
The move is seen as a way for Musk to get one step closer to creating his everything app, similar to companies in China that offer multiple use cases with one platform.
Benzinga reported recently that the X design of the new platform could infringe on trademarks held by Twitter rival Meta Platforms Inc META, which received a trademark for an “X” logo in June 2019.
After making the name change to X, the social media platform also began scooping up handles it wanted related to the letter X or to key topics it wanted to have control over on the platform. X grabbed the @X handle and then also snatched up handles like @music, @sports, @movies and @tv.
One handle the company didn’t grab was @business, which belongs to the financial media company Bloomberg. Instead, the social media platform is using the handle @xbusiness for its business news.
Related Link: Bye Bye Birdie: Here Are The Best Reactions To Twitter's Rebrand To X
What’s Next: Trademark attorney Josh Gerben of Gerben Law said there could be potential trademark challenges for Twitter, now known as X, going forward.
“The Twitter rebrand to ‘X’ is the trademark story of the year,” Gerben said.
Gerben said the rebranding could prove costly for Musk with estimates of $100 million or more in legal fees and settlement costs ahead for the company.
After taking Twitter private in 2022, Musk had shared that he planned to increase the valuation of the company and take it public again someday.
Benzinga previously reported that a potential hurdle could be the X stock symbol belonging to United States Steel Corporation, which would force Musk to use an alternative ticker like XX, XXX, XXXX or something completely different.
The reports of United States Steel being bought out drew plenty of jokes on social media that Musk could be buying the company just to get the X stock symbol.
While Musk will not be the likely suitor if United States Steel is bought out, he will likely be first in line to get the X stock symbol.
The valuation of Twitter has fallen since Musk paid $44 billion with investor Fidelity recently valuing the company at $27 billion.
Twitter was valued at $20 billion when stock awards for the company’s employees were announced in March 2023. While the valuation of the stock awards was less than half of the price Musk paid, the then-CEO said he was optimistic about the company.
Musk said at the time that he saw a “clear, but difficult, path” to a future valuation of more than $250 billion for Twitter.
Read Next: X Gonna Give It To EVs: How U.S. Steel Is Catering To Growing Auto Industry
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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