LONDON (Bywire News) - Elon Musk is buying Twitter. On Monday, April 25 shareholders agreed to his takeover and it looks like everyone’s favourite megalomanic tax avoider will be reigning supreme over our tweets very shortly. However, this isn’t really the story - because what’s really going on is that a load of banks just made a killing.
Who really owns Twitter?
Currently, the corporate media has made a lot of the spat between Musk and Saudi prince Alwaleed bin Talal – publicly played out on (ironically) Twitter. But in reality, bin Talal only owns 5.2% of the company – putting him only just in the top five Twitter shareholders.
Aside from Musk himself the main seats at the Twitter shareholding table are taken by the following investment management firms and banks:
- Vanguard Group (10.3% ownership or 82.4m shares).
- Morgan Stanley (8.4%/67m shares).
- BlackRock (6.5%/52.1m shares).
- State Street Corp (4.5%/36.4m shares).
Between them, they own nearly 30% of Twitter. Then, you have banks/investment management firms with smaller stakes – for example, Barclays owns around 13m shares (1.71%); Bank of America 6.5m (0.85%) and JPMorgan 5.8m (0.77%).
So, Musk taking complete control of Twitter may seem like a good thing, right? Taking the power away from some of the most toxic firms on the planet who already own nearly everything, anyway. Except in the world of corporate capitalism, it doesn’t really work like that.
Musk: payday loans
Musk hasn’t just found the reported $44bn to buy Twitter down the back of the sofa. No, even the world’s most notorious billionaire has to go begging for cash like the rest of us.
As the New York Times reported, Musk is getting loans to pay for $25.5bn worth of the deal. You don’t need to be an anti-corruption cop in Line of Duty to work out what’s going on here. Because of course, some of the banks' Musk is borrowing money off are (you guessed it) already shareholders in Twitter.
For example, according to official documents Musk will be borrowing $13bn from various banks as follows:
- $3.3bn from Morgan Stanley (26.9% of the loan).
- $2.7bn Bank of America (20.7% of the loan).
- $2.7bn from Barclays (20.7% of the loan).
Then, he’s also getting another $12.5bn of the $25.5bn in loans by securing it against his Tesla stock. Once again, he’s getting the cash from various banks – including:
- Morgan Stanley.
- Bank of America.
- And yes.
- You guessed it.
See a theme here?
Banks that are already shareholders in Twitter will be selling their shares to Musk, but loaning him the money to buy said shares off them in the first place.
Sorry – what???
Of course, the maddest part of this sordid tale of corporate cronyism is that it doesn’t end there.
So, Morgan Stanley currently owns 8.4% of Twitter, which it will be selling to Musk - which he’ll be buying with $3.3bn he’s borrowed off it. Not to be left out, Vanguard will be selling its 10.3% stake to Musk, which he’ll be buying with the $3.3bn he’s borrowed from Morgan Stanley, which in turn has 117m shares or 6.72% of its total shareholding owned by… you guessed again – Vanguard.
You literally couldn’t make this shit up. Except it’s exactly how the world goes round under our corporate capitalist system.
As the New Scientist wrote in 2011, research showed that of over 43,000 multinational corporations existing at the time, just 147 companies controlled 40% of them. That is, a few companies owned huge parts of all other ones. As New Scientist noted, the top 25 included (prepare to be shocked):
- Morgan Stanley.
Now, while the world has moved on since then (with the power of individuals like Musk trying to rival that of institutions), it hasn’t changed that much. The rules of engagement for those at the top of our corrupt corporate capitalist system remain the same. If there’s profit to be made, even if on the face of it, it looks like a loss – then the big corporations will make money, regardless.
Morgan hustling Musk
Morgan Stanley must be laughing. Musk will be paying it $3.63bn for its shares in Twitter – and it’s only having to loan him $3.3bn to do this. That’s a $330m profit immediately – without the between 2% and 4.75% interest rate it’s charging him.
So, when you look at it like this – is unscrupulous Musk really the villain of the Twitter saga? Or is it the system that allows men like him to move themselves into such positions of power while banks literally laugh all the way to… the bank?
Given both will ultimately be making a shit load of cash off the backs of the rest of our unconscious addictions to, and reliance on, social media - it’s probably a bit of both.
(Writing by Steve Topple, editing by Klaudia Fior)