Twitter announced on Monday that it accepted a purchase offer from businessman Elon Musk for approximately $44 billion, or $54.20 per share. Once the deal closes, Twitter will become a private company.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk, the world’s richest man, said in a statement. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
“I hope that even my worst critics remain on Twitter, because that is what free speech means,” Musk added in a Tweet.
Bret Taylor, Twitter’s chairman, said the tech giant’s board had “conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
The Wall Street Journal reports:
The deal marks the close of a dramatic courtship and a sharp change of heart at Twitter, where many executives and board members initially opposed Mr. Musk’s takeover approach. The deal has polarized Twitter employees, users and regulators over the power tech giants wield in determining the parameters of acceptable discourse on the internet and how those companies enforce their rules.
The Journal adds:
The takeover, if it goes through, would mark one of the biggest acquisitions in tech history and will likely have global repercussions for years to come related to how billions of people use social media. Mr. Musk, who is also chief executive of Tesla Inc. and Space Exploration Technologies Inc., must find a way to balance his commitment to less moderation with the business needs of a company that has struggled to reconcile free-wheeling conversation with content that appeals to advertisers.
Bloomberg provides context:
Musk, who has more than 83 million followers on Twitter, began amassing shares in the company in January, disclosing a 9% stake earlier this month. That position got him invited to join Twitter’s board, an offer he ultimately rejected, only to turn around on April 14 with an unsolicited bid to buy the company and take it private.
His proposal was met with skepticism on Wall Street because, while he said it was his “best and final” offer, it lacked any details on financing. Even though Musk is the world’s richest person, much of his fortune is tied up in Tesla stock.
Twitter adopted a poison pill as a measure to prevent Musk from buying up more than 15% of the company, while giving the board more time to consider his bid and plot its next move.
Late last week, Musk gave more details on his financing plans, saying in a securities filing that he had lined up Morgan Stanley and other lenders, which were offering $13 billion in debt financing plus another $12.5 billion in loans against his stock in Tesla, as well as pledging to contribute an additional $21 billion of his own money through equity financing. It’s unclear whether Musk, who heads Tesla and Space Exploration Technologies Corp., would consider selling part of his stake in one of his prized companies to acquire Twitter.
The Washington Post reports:
The deal…raises thorny questions about how the outspoken billionaire could put his stamp on a platform widely used by celebrities, politicians, activists and state leaders alike. Rather than making money, Musk has said his primary interest is restoring free speech on Twitter — a goal interpreted by some to mean he would lift restrictions the website has placed on influential figures including former president Donald Trump.
Bloomberg explains how Musk’s acquisition of Twitter impacts Truth Social, Trump’s fledgling social media company:
“Twitter becoming open to a bigger variety of voices is likely to the be last nail in the coffin of Truth Social’s SPAC,” said Max Gokhman, chief investment officer at money manager AlphaTrAI Inc. “It’s hard to see any upside for them given all of the internal struggles with even launching a scalable social platform and now the likelihood that Twitter will allow a broader range of discourse.”
Gokhman noted that Trump could even abandon Truth Social for Twitter since “a bigger audience is an irresistible lure for him.”
Devin Nunes, chief executive officer of Trump Media & Technology Group, told Fox Business Monday that he’s in favor of Musk’s potential acquisition but that he doesn’t necessarily see Twitter as a threat.
“Twitter is a global PR wire, it’s not a community like what we’re trying to build,” he said. “There’s just not that many people on Twitter, quite frankly.”
