Twitter has a New Owner, Elon Musk
One of the world's wealthiest individuals, Elon Musk, has agreed to acquire Twitter for $44 billion and take it private.
Elon Musk agreed to purchase Twitter for around $44 billion on Monday, marking a major success for the world's richest man in his bid to get control of the powerful social network, which is frequented by world leaders, celebrities, and cultural trendsetters.
Earlier this month, Mr. Musk stated that he was the business's single largest shareholder. He had agreed to sell the company for $54.20 per share, representing a 38 percent premium over the company's share price at the time. If Mr. Musk does decide to take Twitter private, it would be the largest corporate transaction in at least two decades, according to statistics gathered by Dealogic. Mr. Musk has stated that he intends to do so.
The announcement of the transaction was made in a statement. According to Mr. Musk, "free expression is the foundation of a healthy democracy, and Twitter is the digital town square where issues critical to the future of mankind are argued." The company and the Twitter community have immense potential, and I am looking forward to working with them to realize it."
With the announcement of the blockbuster agreement, Mr. Musk, 50, has brought an end to what appeared to be an implausible campaign to purchase Twitter — and instantly raised worries about what he would do with the network and how his actions will affect online expression throughout the world.
According to the billionaire, who has more than 83 million followers on Twitter and has romped about the site throwing insult and memes, he wants to "change" the network by supporting more free expression and allowing people greater choice over what they see on it. By turning the firm private, Mr. Musk will be able to concentrate on the service without having to worry about the prying eyes of investors, regulators, and others looking over his shoulder.
However, there will very certainly be a lot more scrutiny. The internet has become a megaphone for political leaders, while businesses, celebrities, and others have used it to refine their images and create their brands. Even if Twitter is not the most popular social media network — it has more than 217 million daily users, compared to the billions who use Facebook and Instagram — it has played a significant part in creating narratives worldwide.
Twitter has also been the focus of criticism in recent years since some users have used the service to promote disinformation and other potentially harmful content. Former President Donald J. Trump routinely used Twitter to taunt and inflame his supporters until the social media platform banned him following a disturbance at the Capitol on Jan. 6, 2017. To deal with unanticipated scenarios, the organization has written rules on the fly.
Mr. Musk has had a tense relationship with free expression on the internet. The president attempted to shut down a Twitter account that monitored his private plane this year, citing personal and safety concerns. In addition, he has fallen into difficulties with the authorities because of his tweets.
On Monday, he stated that he hoped his harshest opponents would continue to express themselves on Twitter because "that is what free speech is all about." He said he aimed to enhance trust by making Twitter's technology more transparent, fighting the bots that spam users on the network, and "authenticating all humans" on the platform.
Republicans in Washington, who have long accused Twitter of stifling their political viewpoints, applauded Mr. Musk's agreement.
Marsha Blackburn of Tennessee, a Republican senator from Tennessee, expressed her hope that Elon Musk will assist rein in Big Tech's history of silencing individuals who hold opposing viewpoints in a tweet.
Mr. Trump said in an interview with Fox News on Monday that he would continue to post on his own social media network, Truth Social. Although he stated that he would not use Twitter, he did express his desire that "Elon acquires Twitter, since he would make changes to it."
Democrats were muted in their opposition to the agreement. Despite declining to comment explicitly on Twitter's sale, White House press secretary Jen Psaki stated that President Biden "has long been worried about the influence of huge social media platforms" and that they should be "held responsible for the harms that they do." She stated that Mr. Biden favored reforms to internet expression and antitrust rules.
In addition to concerns over free speech, Twitter is being scrutinized for its commercial practices. For years, the firm has battled to attract new customers and keep existing customers returning. Twitter's advertising business, which is the primary source of revenue for the company, has been erratic. The social media platform Twitter has not made a profit in eight of the previous ten years.
Despite generating $5.57 billion in revenue, the corporation lost $493 million in the previous year. On the other hand, meta, the corporation that was once known as Facebook, made $39 billion in earnings and generated $118 billion in sales last year.
It's no surprise that Twitter, which went public in 2013, has had a rocky corporate past. It has battled with board dysfunction and turmoil with its founders on a number of occasions. It has been courted by a number of other potential acquisitions in the past, including Disney and Salesforce. In 2020, the activist investment firm Elliott Management purchased a stake in Twitter and asked for Jack Dorsey, one of the company's co-founders, to resign from his position as CEO. Mr. Dorsey resigned from his position last year.
Twitter's chairman, Bret Taylor, said that the board had "conducted a careful and extensive process" on Mr. Musk's proposal and that the purchase would "provide a considerable financial premium" to shareholders. Mr. Musk has shown interest in buying the company.
Former antitrust officials believe that regulators are unlikely to significantly dispute the purchase since the government most frequently intervenes to prevent a deal when a corporation buys a competitor.
The transaction was completed in a matter of weeks. Mr. Musk, who also serves as the CEO of the electric vehicle manufacturer Tesla and the rocket manufacturer SpaceX, began purchasing shares in Twitter in January and reported this month that he had built a stake of more than 9 percent in the social media company.
There was instant speculation about what Mr. Musk intended to do with the platform due to this announcement. Twitter's management first welcomed him to the firm's board of directors, but he quickly reversed direction and made a formal effort to acquire the business within days.
At first, any agreement looked to be improbable since the entrepreneur had not said how he intended to fund the transaction. Twitter's executives expressed skepticism as well, maybe because it was impossible to determine how much Mr. Musk was joking around with them. In 2018, he tweeted that he intended to take Tesla private and falsely said that he had "financing secured" for such a transaction.
To counter Mr. Musk's bid, Twitter implemented a "poison pill," which banned the billionaire from amassing more than 15 percent of the company's stock.
The skepticism began to fade last week when Mr. Musk stated in a regulatory filing that he had secured commitments worth $46.5 billion to finance his bid for the Twitter company.
In addition to debt funding, Morgan Stanley and a consortium of other lenders provided Mr. Musk with $12.5 billion in loans against his Tesla shares for a total of $13 billion. He was supposed to bring around $21 billion in equity funding to the table. On Monday, Twitter did not release further information on the equity fundraising. It also did not impose any conditions on Mr. Musk's financing that would have prevented him from completing the transaction.
According to individuals familiar with the issue, Twitter was obligated to consider Mr. Musk's approach seriously because of the financial commitments, mainly because Mr. Musk threatened to take the offer straight to shareholders in a hostile takeover effort.
Throughout the weekend, in a series of phone conversations and video sessions, the board of directors of Twitter and the billionaire's deal makers worked out the specifics of the acquisition. The crews worked on the last touches late Sunday night and into Monday am.
According to the company, Goldman Sachs, JPMorgan Chase, and Allen & Company served as Twitter's financial advisers, while Morgan Stanley served as Mr. Musk's primary financial counsel.