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New York (CNN)Twitter said Monday it has agreed to sell itself to Elon Musk in a roughly $44 billion deal that has the potential to expand the billionaire’s business empire and put the world’s richest man in charge of one of the world’s most influential social networks.
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.
Under the terms of the deal, shareholders will receive $54.20 in cash for each share of Twitter stock they own, matching Musk’s original offer and marking a 38% premium over the stock price the day before Musk revealed his stake in the company.
“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 Monday. “Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
The deal, which was unanimously approved by Twitter’s board, is expected to close this year. It comes after Musk revealed last week he had lined up $46.5 billion in financing to acquire the company, an apparent turning point that forced Twitter’s board to seriously consider the deal. The board met Sunday to evaluate Musk’s offer.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Twitter independent board chair Bret Taylor said in a statement, calling the deal ” the best path forward for Twitter’s stockholders.”
Twitter stock was up nearly 6% following the announcement of the deal, hovering around $51.84, just shy of the offer price. The deal is pending approval from shareholders and regulators.
In an internal message to employees obtained by CNN, Twitter CEO Parag Agrawal said he would hold an all-hands meeting with Taylor on Monday afternoon to answer questions about the deal. “I know this is a significant change and you’re likely processing what this means for you and Twitter’s future,” he said. CNN
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Musk is both a high-profile Twitter user and a controversial one. He has more than 83 million followers on the platform, which he has used over the years for everything from sharing memes and discussing his companies to insulting politicians, spreading misleading claims about Covid-19 and making offensive remarks about the transgender community.
Musk has repeatedly stressed in recent days that his goal is to bolster free speech on the platform and work to “unlock” Twitter’s “extraordinary potential.”
In his statement Monday, Musk said he wants 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.” Separately, he said in a tweet Monday that he hopes “even my worst critics remain on Twitter, because that is what free speech means.”
Still, some industry experts worry that Musk’s desire for free speech on Twitter could mean rolling back some of the platform’s work to curb hate speech, misinformation, harassment and other harmful content. Others questioned whether Musk might restore former President Donald Trump’s account, which was removed early last year for violating Twitter policies against inciting violence following the Capitol Riot. Such a move could have significant ramifications for the upcoming 2024 US presidential election.
While Twitter is smaller than some social media rivals, it has an outsized influence in the online and offline worlds because it is used by many politicians, public figures and journalists, and has sometimes acted as a model for other platforms in how to handle harmful content.
“Do not allow Twitter to become a petri dish for hate speech, or falsehoods that subvert our democracy,” Derrick Johnson, president of the NAACP, said in a statement directed at Musk Monday following the deal.
A new and uncertain era for Twitter
In the days since Musk’s initial bid, many following the company wondered whether Twitter would try to find another buyer, especially after the company put in place a poison pill to make it more difficult for Musk to acquire the company without its approval.
But CFRA senior equity analyst Angelo Zino said Monday that Twitter’s board more seriously considering Musk’s offer may have come “from the Board’s realization that an alternative bid from a ‘white knight’ may be difficult to come by, especially following the decline in asset prices from social media companies in recent 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 previously tweeted a meme comparing Agrawal to former Soviet leader Joseph Stalin. Musk also said in his offer letter to buy Twitter that he does not “have confidence in management.”
The deal could, however, put an end to nearly a decade of chaos at Twitter as a public company, during which it has cycled through CEOs, grappled with an activist investor and struggled to ignite growth and successfully monetize its influential user base.
Agrawal said in Monday’s statement that “Twitter has a purpose and relevance that impacts the entire world,” He added: “Deeply proud of our teams and inspired by the work that has never been more important.” CNN
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