Twitter announced that it accepted an acquisition offer from Tesla CEO Elon Musk for roughly $44 billion, and it will become a private company once the transaction is closed.
This is a surprising turn of events as Twitter’s board had appeared to resist Musk’s effort to buy the social media and even adopted a “poison pill” defense earlier this month, after Musk originally made them the offer to buy all outstanding shares for $54.20.
However, things appeared to change after Musk released proof of funding last Friday. This weekend, reports had been coming out stating that the board was now seriously considering the offer.
Today, the board announced that it has officially accepted Musk’s offer:
Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company.
Musk commented in a press release confirming the acquisition:
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. 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.
As we previously reported, Musk managed to secure $25.5 billion of fully committed debt and margin loan financing, most of which is backed by his stake in Tesla, and he is going to provide an additional $21.0 billion in equity.
Musk is expected to bring in partners for the equity portion of the deal, but he will ultimately be the majority owner of Twitter.
Obviously, this is a controversial situation. A lot of people are not comfortable with the richest man in the world owning one of the main platforms people use to communicate.
I myself have been really critical of Musk’s own use of Twitter, which I think corrupted his Tesla feedback loop over time. However, I do agree with virtually all the changes that Musk is talking about implementing once he gains full control over the platform – especially open-sourcing the algorithm and making all moderation completely transparent.
I don’t think anyone can argue against those changes.
Where people are more worried is in the indications that he would ban any voices as long as they don’t break the law, which could bring back some people to the platform – like Donald Trump. Some are worried that it will result in Twitter becoming a platform where more misinformation is shared.
It’s going to be about balancing free speech and limiting the spread of misinformation. But is Elon Musk the one to do it?
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