Elon Musk on Monday acquired Twitter for $44 billion, the company announced, giving the world’s richest person command of one of its most influential social media sites — which serves as a platform for political leaders, a sounding board for experts across industries and an information hub for millions of everyday users.
The acquisition followed weeks of evangelizing on the necessity of “free speech,” as the Tesla CEO seized on Twitter’s role as the “de facto town square” and took umbrage with content moderation efforts he has seen as an escalation toward censorship. He said he sees Twitter as essential to the functioning of democracy and said the economics are not a concern.
Ownership of Twitter gives Musk power over hugely consequential societal and political issues, perhaps most significantly the ban on former president Donald Trump that the website enacted in response to the Jan. 6 riots.
Under the terms of the deal, Twitter will become a private company and shareholders will receive $54.20 per share, the company said in a news release. The deal is expected to close this year.
“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 said in the release. “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.”
Musk’s positions have put him relatively at odds with current leadership at the site, raising questions about how he will seek to steer his changes through and whether they will impact Twitter’s current executive makeup.
Musk has said he would open up the website’s algorithm, putting content moderation decisions into clear view, although some researchers have said that would be difficult. He has also pushed for simple, broadly popular changes such as adding an edit button, as well as pledging to eliminate spam bots. And he has said he wants to open up Twitter’s verification process to more users, so the authenticity of accounts can be determined more easily.
Musk, an avid Twitter user with over 83 million followers, earlier on Monday hinted that a deal was close, laying out his vision for the future of Twitter in a midday tweet. “I hope that even my worst critics remain on Twitter, because that is what free speech means,” he wrote.
I hope that even my worst critics remain on Twitter, because that is what free speech means
The deal would rank among the largest activist takeovers of a publicly traded company, according to Dealogic, which tracks data on mergers. Since 1995, the largest takeover by activist shareholders of a company was AstraZeneca’s 2021 purchase of Alexion Pharmaceuticals for about $42 billion, Dealogic said.
“Twitter has a purpose and relevance that impacts the entire world,” Twitter CEO Parag Agrawal said in the release. “Deeply proud of our teams and inspired by the work that has never been more important.”
Twitter board chair Bret Taylor said the decision came down to the economics of the deal. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” he said in the release.
Twitter kicked off deal negotiations with Elon Musk on April 24 after he wooed many of the social media company’s shareholders. (Video: Reuters)
Twitter had seemed poised to reject Musk’s hostile takeover bid for the social media platform. The board adopted a so-called “poison pill” plan the day after Musk‘s offer, which would make it much more difficult for the billionaire to buy the company.
The strategy, known as a shareholder rights plan, would let investors buy Twitter stock at a discounted price unavailable to Musk. The flood of new shares would potentially make it prohibitively expensive for Musk to buy the company.
Then Musk outlined his financing last week, saying he secured $46.5 billion through loans by banks, including Morgan Stanley, and his own equity.
The company’s board of directors met with Musk on Sunday, and negotiations extended into the early hours of Monday, according to a person familiar with the negotiations, who spoke on the condition of anonymity because of the sensitivity of the discussions. The two sides were focused on determining whether Musk had the financing to complete the acquisition, and did not spend much time discussing Musks’s strategy for the future of the social network, the person said.
Musk had also met privately with several large Twitter shareholders in recent days, with some expressing their support for his bid, the person said. The two sides did not see regulatory issues, such as an antitrust review, as likely roadblocks to closing the deal, the person added.
Musk is worth about $259 billion according to the Bloomberg Billionaire’s Index, but much of his wealth is tied up in stock. The entrepreneur serves as CEO of electric car company Tesla, aerospace company SpaceX, and co-founded payment service PayPal.