Bill Ackman Says He'd Invest In X Through His SPARC Structure

Bill Ackman recently told CNBC he had not yet had a formal conversation with Elon Musk regarding a deal involving X (F.K.A. Twitter). Nevertheless, the billionaire investor noted that he likes both Musk and the controversy-plagued social media platform.

Although Ackman is interested in a deal with X, he isn't sure if the 52-year-old tech mogul wants it. "I have a lot of respect for Musk, I think Twitter is a really important platform, I think he's made tremendous improvements to the platform, and I think it's a very difficult-to-disrupt kind of asset," Ackman told CNBC's Andrew Ross Sorkin in an interview.

The Pershing Square Holdings CEO even shed some light on his carve-out vehicle dubbed SPARC (special purpose acquisition rights company). The product bears a striking resemblance to SPAC (special purpose acquisition company).

Should Elon Musk show interest in this deal?

However, Ackman suggests Pershing's structure would specifically team up with companies it considers as long-term investments. SPACs grabbed the attention of investors and also drew regulatory scrutiny because they allowed insiders to make huge profits courtesy of non-favoured investors.

Furthermore, Ackman believes X's massive debt load, which is owed to a consortium of banks, should encourage Musk to agree to the deal. In fact, he suggests Musk should consider taking a part of X public again.

Last month, The Financial Times reported X bankers are suffering and looking for ways to get out. As if that weren't enough, X CEO Linda Yaccarino recently admitted that the platform is losing its daily active users after Musk's takeover last year.

In a separate interview with The Wall Street Journal, Ackman said he is willing to invest in X through his new SPARC structure. Meanwhile, Musk claims revenues have fallen by double-digit percentages and despite Yaccarino's efforts, ad revenue hasn't returned to pre-acquisition levels.

Twitter Vs. Threads

As if that weren't enough, Meta is sparing no effort to compete with X. However, the company's Twitter rival Threads has also struggled to retain users. Still, the Mark Zuckerberg-led tech company has existing relationships with big advertisers.

Meta is reportedly looking for ways to revive interest in its Twitter clone. In line with this, the company even launched the Threads web version. According to Insider Intelligence, Threads could have 23.7 million US-based users by this year.

Still, it will be far behind TikTok, Instagram and Facebook, which have 102.3 million, 135.2 million and 177.9 million users, respectively. X will have 56.1 million US-based users in 2023, as per the forecast.

In other words, Threads will have less than half of the US user base of Twitter. The analyst firm claims Threads will continue to "rank second-to-last among social networks" through to 2025.