Despite the endless chaos surrounding the Ukraine and Russian war, the world keeps moving and there is no time for rest without new surprises. Elon Musk comes out strong with bold statements regarding the acquisition of Twitter, South Korea sees its new president take office in a new era, and the cryptocurrency market warns investors once again of the dangers of alternate vehicles of investment.
- #Elon Musk’s deal to acquire Twitter is on hold.
On April 14th, Elon Musk offered to buy Twitter for 44 billion dollars, a valuation that prices a share of Twitter at $54.20, 9 dollars above the market value. Elon expressed that he believed that Twitter had huge potential to be a platform for free speech for everyone around the world, but also wanted to make some changes to the way the platform was run. One thing is clear: Elon Musk’s takeover of Twitter is not focused on gains but on shaping Twitter into Musk’s ideal platform for freedom of speech.
Musk’s decision to take over Twitter came about after a little incident involving Musk’s interest in the company. Previously, although Musk had attempted to get a minority stake of 15% of the company to make changes to the company, his plans were halted when the underlying offered him a seat on the board of directors, which restricted him from owning 15% of the company and dictating any changes. Thus, Elon Musk attempted to bypass these restrictions by offering to take over the entire firm. Not only did Elon Musk offer to buy Twitter, but SEC filings showing that Musk had sold 8.4 billion dollars worth of Tesla shares also show his commitment to the takeover. On April 25th, Twitter accepted Elon Musk’s offer at a 44 billion dollar valuation, but the deal is far from over. More recently, Elon Musk has put the deal on hold due to pending details on spam/fake accounts on the platform that has to be cleared up, but also highlights that he is still committed to the deal. In the case that the deal does not go through, Elon Musk will have to pay a 1 billion dollar breakup fee and also faces the risk of being sued for a breach of contract. Time will tell whether this deal is serious or just another of Elon’s memes on Twitter.
Yoon Suk-yeol was sworn into office as the new president of South Korea on May 10th. In his inaugural speech, Yoon expressed once more his conservative values and policies: stronger sanctions against North Korea, and closer ties with the United States, among others. And, despite accusations of President Yoon “pandering to widespread sentiment against China as well as an anti-feminist movement led by young South Korean men,” Yoon vowed to stand up for values like freedom and liberal democracy and is set on leaving a good impression on the people (Sang-hun, Choe). One of his first moves as president, a change in the presidential office from the Blue House to the Defense Ministry compound in Yongsan District, displays Yoon’s determination to show the people that he is insistent on delivering change.
Aside from the political frictions that come with Yoon’s inauguration, many have turned to the new president for a hope for change in South Korea’s housing market. South Korea’s housing prices saw the largest surge since the early 2000s last year, and policies regarding the housing market has been a major factor in the presidential election. Yoon’s agenda promises the removal of high capital gains taxes on multiple homeowners, which his party believes would encourage the homeowners to sell their properties and ultimately lead to a more stable real state with lower prices. More recently, however, the housing market has seen the opposite effect due to the anticipation of Yoon’s policy changes; “an 84-square-meter apartment which sold for 2.55 billion won in February listed at between 2.7 and 2.8 billion won” in April (Lee, Ho-Jeong, and Eun-Hwa Han). However, expectations for these policy changes remain relatively high, and Korea may be finally seeing concrete changes to the housing market.
Luna, a cryptocurrency, has lost nearly all of its value and collapsed to nearly 0 dollars from an all-time high value of $119. Luna is a cryptocurrency that is affiliated with TerraUSD, also known as UST, which is a stablecoin that stabilizes the price of the underlying to maintain a one-to-one peg with the U.S. Dollar. TerraUSD is able to keep the relative price to the dollar stable through a complex system of minting and burning that involves the burning of Luna cryptocurrency but recently has not been able to maintain the relative price ratio. When TerraUSD’s value fell and become less valued than the dollar, Luna, which is correlated to TerraUSD, quickly fell in price with it.
More and more investors have become skeptical of Luna and have started dumping the coin after TerraUSD lost its peg. The mass-selling of Luna was so intense that Binance, one of the largest cryptocurrency exchanges, had “slowness and congestion” due to the “high volume of pending Terra network withdrawal transactions” (Kharpal, Arjun). Furthermore, the cryptocurrency exchange had to suspend the withdrawal of Luna for a few hours during the mass dump. This incident surrounding TerraUSD and Luna brings great skepticism to an already down cryptocurrency market and tests the credibility of investment vehicles.
Whether Elon Musk ultimately goes through with the deal with Twitter or not, there will certainly be changes or repercussions to the bold offers made by Musk. We may also possibly see a directional shift in Twitter’s policies and values. South Korea, in a very similar light, is seeing the introduction of a new leader that comes with new ideologies and policies. These changes leave us curious about what the future may hold. The cryptocurrency market, which has already taken a beating in recent quarters, continues to be disappointed by examples like Luna, which continuously shed a skeptical light on the technology.
Sources (of research and visuals)
Hawkins, Andrew J. “Elon Musk Buys Twitter: All the News You Need on One of the Biggest Tech Deals of All Time.” The Verge, The Verge, 16 Apr. 2022, https://www.theverge.com/23026874/elon-musk-twitter-buyout-news-updates.
Kharpal, Arjun. “Cryptocurrency Luna Now Almost Worthless after Controversial Stablecoin It Is Linked to Loses Peg.” CNBC, CNBC, 13 May 2022, https://www.cnbc.com/2022/05/12/cryptocurrency-luna-now-almost-worthless-after-ust-falls-below-peg.html.
Kim, Sarah. “Korea's New President, Yoon Suk-Yeol, Gets Fresh Start in New Location.” Korea JoongAng Daily, https://koreajoongangdaily.joins.com/2022/05/09/national/politics/Korea-Yoon-Sukyeol-inauguration/20220509230113162.html.
Lee, Ho-Jeong, and Eun-Hwa Han. “Yoon Promises to Deliver on Property Campaign Promises.” Korea JoongAng Daily, https://koreajoongangdaily.joins.com/2022/04/04/business/economy/Yoon-Sukyeol-Real-estate-Moon-Jaein-debacle/20220404192009235.html.
Sang-hun, Choe. “In Korea, a New President in the South Vows a Harder Line on the North.” The New York Times, The New York Times, 10 May 2022, https://www.nytimes.com/2022/05/10/world/asia/south-korea-yoon-president.html.
Sherman, Alex. “Elon Musk Can't Just Walk Away from His Twitter Deal by Paying a $1 Billion Breakup Fee.” CNBC, CNBC, 14 May 2022, https://www.cnbc.com/2022/05/13/elon-musk-cant-just-walk-away-from-twitter-deal-by-paying-1-billion.html.