Elon Musk to buy Twitter in $44 billion deal
Twitter announced on Monday that it has agreed to sell itself to Elon Musk for $44 billion in a transaction that may help the billionaire expand his business empire and put him in command of one of the world’s most popular social networks.
The agreement, which will take Twitter private, comes after a dizzying month in which Elon Musk became one of Twitter’s top shareholders, was offered and turned down a seat on the board, and made a bid to buy the business – all in less than a month.
Shareholders would receive $54.20 in cash for each share of Twitter stock they own under the terms of the agreement, which is identical to Musk’s original offer and represents a 38 percent premium over the stock price the day before Musk declared his investment in the firm.
“Free speech is the backbone of a functional democracy, and Twitter is the digital town square where important issues affecting humanity’s future are debated,” Musk said in a statement released Monday. “Twitter has enormous potential, and I’m excited to work with the company and the Twitter community to realize it.”
The purchase is anticipated to finalize this year, after being unanimously authorized by Twitter’s board of directors. It comes after Musk revealed last week that he had secured $46.5 billion in financing to buy Twitter, a move that appears to have prompted the company’s board to seriously explore the acquisition. The board met on Sunday to consider Musk’s proposal.
Twitter independent board chair Bret Taylor said in a statement that the purchase was “the greatest path ahead for Twitter’s stockholders” after “a rigorous and exhaustive process to review Elon’s proposal with a deliberate focus on value, clarity, and finance.”
Following the announcement of the agreement, Twitter stock jumped about 6%, hovering around $51.84, slightly below the offer price. The deal is subject to shareholder and regulatory approval.
Twitter CEO Parag Agrawal said in an internal message obtained by CNN that he will host an all-hands meeting with Taylor on Monday afternoon to answer questions regarding the deal. “I understand this is a big transition, and you’re probably thinking about what it means for you and Twitter’s future,” he continued.
What Musk means for Twitter
Musk is a well-known Twitter user as well as a contentious one. On the network, he has over 83 million followers and has used it for everything from sharing memes and discussing his enterprises to attacking politicians, distributing false information on Covid-19, and making derogatory remarks about the transgender community.
Musk has stated several times in recent days that his goal is to promote free expression on Twitter and to “unlock” the platform’s “amazing potential.”
Musk said in a statement Monday that he wants to “make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating spam bots, and authenticating all humans,” and that he hopes “even my harshest critics remain on Twitter, because that is what free speech means.”
Nonetheless, some industry experts are concerned that Musk’s goal for free speech on Twitter may result in the platform’s efforts to combat hate speech, misinformation, harassment, and other negative content being undone. Others wondered if Musk might reinstate former President Donald Trump’s Twitter account, which was suspended early last year for encouraging violence in the aftermath of the Capitol Riot. A move like this might have major implications for the forthcoming US presidential election in 2024.
While Twitter is smaller than some of its social media competitors, it has a large online and offline presence since it is used by many politicians, public figures, and journalists, and has served as a model for other platforms in terms of how to handle problematic information.
“Do not allow Twitter to become a breeding ground for hate speech or falsehoods that undermine our democracy,” warned Derrick Johnson, president of the NAACP, in a statement issued after the deal was announced on Monday.
A new and uncertain era for Twitter
Many Twitter fans worried if the firm would try to find another buyer in the days since Musk’s initial bid, especially after the company put in place a poison pill to make it more difficult for Musk to acquire the company without its consent.
However, according to CFRA senior equities analyst Angelo Zino, Twitter’s board of directors is taking Musk’s offer more seriously since “an alternative proposal from a ‘white knight’ may be tough to come by, especially given the recent decrease in asset prices from social media businesses.”
It’s unclear whether Agrawal, who succeeded founder Jack Dorsey as CEO in November, will remain in the position following the takeover. Musk earlier compared Agrawal to former Soviet despot Joseph Stalin in a meme. In his offer letter to buy Twitter, Musk also stated that he “does not have faith in management.”
The purchase, on the other hand, might bring an end to Twitter’s nearly decade-long state of instability as a public business, during which it has gone through several CEOs, battled an activist investor, and struggled to ignite growth and successfully monetize its significant user base.
“Twitter has a purpose and significance that influences the entire world,” Agrawal said in a statement released Monday. “Deeply proud of our teams and inspired by work that has never been more vital,” he said.