Reaches $44B deal to buy Twitter, vows ‘free speech’
Elon Musk is set to take over Twitter after reaching an agreement Monday to buy the socialmedia giant for $44 billion cash — bringing an end to a weekslong saga and ushering in a new era for the platform.
The Tesla billionaire, who has said he wants to privatize Twitter because he doesn’t think it lives up to its potential as a free-speech platform, celebrated the deal by vowing to make the site more open and “better than ever.”
“I hope that even my worst critics remain on Twitter, because that is what free speech means,” Musk said after the deal was announced.
“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.”
Big plans
The CEO of Tesla and SpaceX, who is expected to take control of Twitter in about six months, said he wanted to introduce features that defeat “spam bots,” make Twitter’s algorithms open to the public and authenticate all humans using the platform. “Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it,” Musk said. Late Monday, Twitter co-founder Jack Dorsey sent out a tweet endorsing Musk’s vision. “Elon’s goal of creating a platform that is ‘maximally trusted and broadly inclusive’ is the right one,” Dorsey wrote. Twitter’s board of directors unanimously approved the deal, the company said, weeks after Musk put his take-it-orleave-it offer on the table.
Musk, the world’s richest person, will pay $54.20 per share for the company, Twitter said.
Trading of Twitter’s stock was halted leading up to Monday’s announcement. Twitter shares were trading at $51.98 each ahead of the pause, suggesting investors were unsure whether the deal would go through. The stock closed at $51.70.
“The Twitter board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty and financing,” Twitter board chair Bret Taylor said.
“The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Takeover saga
The deal ended a drama that began this month when Musk revealed he had acquired a 9.2% stake in the company. Days later, he turned down an offer to join the board, setting up a showdown that culminated in a hostile takeover bid.
Twitter’s board initially adopted a defense strategy known as a “poison pill,” whereby it offered shareholders an opportunity to buy up more stock at a discount, thus diluting its value in hopes of dissuading Musk from mounting a takeover.
But the board opted to negotiate last week after Musk revealed that he had secured $46.5 billion in financing and investors pressured the board to consider his offer.
Board members raised several red flags during negotiations, including Musk’s ongoing legal battles with the Securities and Exchange Commission.
The SEC has been probing Musk’s August 2018 tweets in which he claimed he had secured funding to take Tesla private for $420 a share — even though he hadn’t.
“The board got some extra time with the poison pill but ultimately had to get to the negotiation table with Musk to get this deal done,” Wedbush Securities managing director Dan Ives said.
“We do not expect any major regulatory hurdles to the deal getting done as this soap opera now ends with Musk owning Twitter.”
Twitter said the transaction is expected to close this year, after which the company will be privately held. The deal is still subject to approval from stockholders and regulatory approvals, as well as other customary closing conditions.
Amid the negotiations, Twitter was reportedly unable to secure a “go-shop” provision from Musk, which would have allowed the company to solicit other bids from potential buyers after the deal was signed.
At $44 billion, Musk is paying more than 175 times as much for Twitter as Jeff Bezos paid for The Washington Post in 2013.
What about Don?
Musk’s acquisition of Twitter unnerved many of the site’s more liberal users, while also energizing pro-Republican voices who want the platform to reinstate former President Donald Trump after he was banned in the wake of the Jan. 6 Capitol riot.
While Musk has voiced support for less stringent contentmoderation policies at Twitter, like those that got Trump banned, he hasn’t disclosed whether he will allow the ex-president to return to the platform.
After Musk’s Twitter deal, Trump insisted he wouldn’t rejoin the platform even if his account were reinstated, telling Fox News that he would use his own TRUTH Social platform instead.