Elon Musk Buys Twitter for $44B, Plans to Take Company Private
Monday afternoon Twitter announced that Elon Musk has entered into a definitive agreement to acquire the social media company and take it private. The deal, valued at approximately $44 billion, will give each of Twitter’s current stockholders $54.20 per share in cash upon closing. The purchase price represents a 38 percent premium to Twitter’s closing stock price on April 1, which was the last trading day before Musk announced his 9 percent stake in the company.
This news comes nearly two weeks after Musk proposed purchasing Twitter in a deal then valued at $40 billion.
Musk said in a company statement that his biggest plans for the platform are to ease content restrictions in the name of free speech. This decision has been hotly debated on the internet, some applauding Musk’s efforts for anti-censorship and others raising concerns over how relaxed content restrictions might lead to greater instances of harassment and hate speech, a problem Twitter already struggles to manage.
“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 a statement. “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 spambots and authenticating all humans. Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
Other changes Musk may bring to the platform include an edit button, removal of ads — the platform’s main source of revenue — and a price reduction of the platform’s premium service Twitter Blue. While Musk has tweeted his support of some of these changes, nothing has been set in stone.
The news was met with mixed responses online with some users tweeting their goodbyes. The hashtag #leavingtwitter was trending yesterday as users either denounced Musk’s acquisition or made memes mocking those logging off. Others remained online albeit worried about the future of the site. Some even raised concerns about former president Donald Trump being allowed back on the platform. Trump was originally banned from a number of social media sites including Twitter in the aftermath of the January 6 insurrection on the Capitol. Musk has not disclosed yet whether or not Trump’s account might be reinstated.
While online discourse may be varied, opinions of the deal within the board seemed to be the same. Twitter’s board of directors voted unanimously to approve the deal after deliberating details around Musk’s proposed financing for the transaction. According to a company statement, Musk plans to use $25.5 billion of fully committed debt and margin loan financing and provide an approximately $21 billion equity commitment.
“The Twitter board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty and financing,” Bret Taylor, Twitter’s independent board chair member, said in a statement. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Much still remains in the air. While it might seem like the acquisition is a done deal, it still must be approved by Twitter stockholders in order to make the purchase final. If approved, the transaction is expected to close later this year.