Twitter’s board has accepted Elon Musk’s roughly $44 billion offer to purchase the social media company.
Musk, Tesla and SpaceX CEO, will take Twitter private. The purchase of the company has been in the works for several weeks.
Twitter’s board of directors unanimously approved the deal, but it is not final yet. It is expected to close this year, with the sale still dependent on Twitter stockholders’ approval, applicable regulatory approvals, and the satisfaction of other customary closing conditions.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Twitter’s Independent Board Chair Bret Taylor. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Twitter’s stock went up nearly 6% following the deal’s announcement, just short of Musk’s offer.
Earlier this month, Musk revealed that he owned approximately 9.2% of Twitter’s stocks, making him the company’s single largest shareholder. The company offered him a spot on its board of directors, but Musk declined. Soon after, he offered to buy the company at $54.20 a share for a total valuation of over $43 billion.
Initially, Twitter rebuffed the offer as they did not believe he had the funding secured since most of Musk’s wealth is tied up in Tesla stocks. However, last week, Musk revealed he had secured $46.5 billion in financing in a filing with the Security Exchanges Commission. About $25 billion in debt financing from the investment bank, Morgan Stanley, while Musk is committing around $21 billion in equity financing.
The revelation that Musk had the funding secured forced Twitter to take the offer seriously, which they have now accepted. Musk has said that he wants to make Twitter a platform where free speech is prioritized.
“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. “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 frequently uses Twitter and has amassed over 83 million followers. He often shares jokes on the platform and makes company announcements.
In an internal company memo obtained by CNN, Twitter CEO Parag Agrawal said he would be holding a meeting on Monday afternoon with Taylor to answer questions the staff may have regarding 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.
At the TED2022 conferences, Musk shared how he would like to see Twitter change.
“I think it’s very important for there to be an inclusive arena for free speech,” he said while acknowledging that some censorship is still needed for explicit calls for violence and to ensure compliance with laws.
He also added that he prefers “time-outs” instead of permanent bans, which hints at a possible path for former president Donald Trump to return to Twitter. Twitter banned Trump due to his tweets around the January 6 protests and riots at the U.S. Capitol. “The risk of further incitement of violence” was cited as the reason for the ban.
Some fear that hate speech and misinformation will quickly spread on the platform under Elon Musk’s ownership.
“Do not allow Twitter to become a petri dish for hate speech, misinformation, or disinformation. Protecting our democracy is of utmost importance,” Derrick Johnson, president of the NAACP, said in a statement directed at Musk Monday following the deal.
Nonetheless, the deal brings a close to more than a decade of chaos at Twitter. The company has cycled through CEOs, grappled with an activist investor, and struggled to ignite growth and successfully monetize its influential user base.
Agrawal, who took over the CEO position from founder Jack Dorsey in November, added that “Twitter has a purpose and relevance that impacts the entire world.”