Elon Musk to buy Twitter in $44 billion deal
The deal, which will take the company private, caps off a whirlwind period in which the Tesla and SpaceX CEO became one of Twitter’s largest shareholders, was offered and turned down a seat on its board and bid to buy the company — all in less than a month.
The deal will see shareholders receive $54.20 cash per share of Twitter stock. This is Musk’s original offer. It also marks a 38% premium to the stock price on the day Musk announced his ownership.
Musk released a Monday statement stating that “free speech is the cornerstone of democracy.” “Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
It is anticipated that the deal will close in 2015. This deal comes just weeks after Musk announced that he has secured $46.5 billion of financing for the acquisition. It is an evident turning point which forced Twitter’s board into serious consideration. Monday’s meeting saw Musk’s offer be evaluated by the board.
Bret Taylor, Twitter’s independent board chair, said that “The Twitter Board carried out a thoughtful, comprehensive process to examine Elon’s proposal with an intentional focus on value certainty and financing.” He also called the deal “the best way forward for Twitter’s stockholders.”
The Twitter stock rose nearly 6 percent after the announcement. It hovered around $51.84, just below the offer price. Approval from regulators and shareholders is required for the deal to go ahead.
Parag Agrawal, Twitter’s CEO and founder stated that he will hold an all-hands meeting on Monday with Taylor to address any questions regarding the deal. He said, “I understand this is a major change. You’re probably processing what it means for you as well as Twitter’s future.”
Twitter: What Musk is trying to communicate
Musk is both an influential and controversial Twitter user. Musk has over 83 million Twitter followers. He uses the platform to share memes, discuss his companies, insult politicians and make offensive comments about transgender people.
Musk repeatedly stated in recent days his desire to increase free speech and unlock Twitter’s “extraordinary potential”
Musk stated Monday that he wanted to make Twitter “better than ever” by adding new features to the platform, making algorithms open-source to improve trust, eliminating spambots and authenticating everyone. In a separate tweet, Musk said Monday that even his worst critics will be on Twitter. This is free speech.
Some industry professionals worry Musk’s wish for freedom of speech on Twitter might mean that some of its work to combat hate speech and misinformation could be reversed. Other people wondered whether Musk could restore an account belonging to former President Donald Trump that was deleted in the wake of violating Twitter policies on inciting violence. This could have important implications for the 2024 US Presidential Election.
Twitter’s size is not as great as some other social media sites, but it does have a significant influence on the offline and online worlds. Twitter is often used by journalists and politicians. It has also been an example for others platforms regarding how to deal with harmful content.
Musk should not be allowed to use Twitter as a breeding ground for hate speech or other falsehoods, Derrick Johnson of the NAACP said Monday in a statement.
Twitter is entering a new, uncharted era
Many who had been following Twitter in recent days wondered if they would attempt to buy another company, particularly after Musk put in place the poison pill that made it harder for Musk to purchase the company.
Angelo Zino from CFRA, a senior equity analyst said that Musk’s offer to Twitter was taken more seriously by the board. He stated that the Board realized that it may be hard for a “white knight” to make an alternative bid due the fall in asset values from social media firms in the past weeks/months.
It’s not clear whether Agrawal — who took over the CEO role from founder Jack Dorsey in November — will remain in the top job following the takeover. Musk tweeted previously a meme in which he compared Agrawal with former Soviet leader Joseph Stalin. Musk said that he did not have confidence in the management of Twitter in his offer letter.
However, the deal will end nearly 10 years of chaos at Twitter. Twitter has been a public company since 2002. During that time, it had changed CEOs and faced an activist investor, and failed to incite growth or monetize its user base.
Agrawal stated Monday that Twitter has “a purpose and relevance which impacts the whole world”, He also added that he was proud of his teams and is inspired by their work.
Clare Duffy, SME Tech reporter at CNN can be reached by email clare.duffy@cnn.com
This report was contributed by Brian Stelter, SME’s Donie O’Sullivan.
