Elon Musk acquired Twitter for $44 billion on Monday, the company announced, giving the world’s richest person command of one of its most influential social media sites — which serves as a platform for political leaders, a sounding board for experts across industries and an information hub for millions of everyday users.
The acquisition followed weeks of evangelizing on the necessity of “free speech,” as the Tesla CEO seized on Twitter’s role as the “de facto town square” and took umbrage with content moderation efforts he has seen as an escalation toward censorship. He said he sees Twitter as essential to the functioning of democracy and said the economics are not a concern.
Ownership of Twitter gives Musk power over hugely consequential societal and political issues, perhaps most significantly the ban on former president Donald Trump that the website enacted in response to the Jan. 6 riots.
Under the terms of the deal, Twitter will become a private company and shareholders will receive $54.20 per share, the company said in a news release. The deal is expected to close this year.
“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 the release. “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’s positions have put him relatively at odds with current leadership at the site, raising questions about how he will seek to steer his changes through and whether they will impact Twitter’s current executive makeup.
Musk has said he would open up the website’s algorithm, putting content moderation decisions into clear view, although some researchers have said that would be difficult. He has also pushed for simple, broadly popular changes such as adding an edit button, as well as pledging to eliminate spam bots. And he has said he wants to open up Twitter’s verification process to more users, so the authenticity of accounts can be determined more easily.
Musk, an avid Twitter user with over 83 million followers, earlier on Monday hinted that a deal was close, laying out his vision for the future of Twitter in a midday tweet. “I hope that even my worst critics remain on Twitter, because that is what free speech means,” he wrote.
The deal would rank among the largest activist takeovers of a publicly traded company, according to Dealogic, which tracks data on mergers. Since 1995, the largest takeover by activist shareholders of a company was AstraZeneca’s 2021 purchase of Alexion Pharmaceuticals for about $42 billion, Dealogic said.
“Twitter has a purpose and relevance that impacts the entire world,” Twitter CEO Parag Agrawal said in the release. “Deeply proud of our teams and inspired by the work that has never been more important.”
Twitter board chair Bret Taylor said the decision came down to the economics of the deal. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” he said in the release.
Twitter had seemed poised to reject Musk’s hostile takeover bid for the social media platform. The board adopted a so-called “poison pill” plan the day after Musk‘s offer, which would make it much more difficult for the billionaire to buy the company.
The strategy, known as a shareholder rights plan, would let investors buy Twitter stock at a discounted price unavailable to Musk. The flood of new shares would potentially make it prohibitively expensive for Musk to buy the company.
Then Musk outlined his financing last week, saying he secured $46.5 billion through loans by banks, including Morgan Stanley, and his own equity.
The company’s board of directors met with Musk on Sunday, and negotiations extended into the early hours of Monday, according to a person familiar with the negotiations, who spoke on the condition of anonymity because of the sensitivity of the discussions. The two sides were focused on determining whether Musk had the financing to complete the acquisition, and did not spend much time discussing Musks’s strategy for the future of the social network, the person said.
Musk had also met privately with several large Twitter shareholders in recent days, with some expressing their support for his bid, the person said. The two sides did not see regulatory issues, such as an antitrust review, as likely roadblocks to closing the deal, the person added.
Musk is worth about $259 billion according to the Bloomberg Billionaire’s Index, but much of his wealth is tied up in stock. The entrepreneur serves as CEO of electric car company Tesla, aerospace company SpaceX, and co-founded payment service PayPal.
Beyond the bank loans, it’s unclear how Musk intends to pay for more than $21 billion of the deal which he described as “equity financing” from himself. He could borrow against or sell shares of his Tesla stock, though that path would raise risks for the share price of the electric carmaker.
“If Elon Musk were forced to sell shares of our common stock that he has pledged to secure certain personal loan obligations, such sales could cause our stock price to decline,” Tesla warned in its annual filing.
Musk took a more than 9 percent stake in Twitter earlier this year, leading to two wild weeks of back-and-forth with the company. The company announced he would join the board, then days later said he had withdrawn. Musk launched his hostile takeover bid soon after.
As of Monday afternoon, the proposed deal did not include a so-called “go shop” provision that is a common term in large mergers which allows boards of directors to continue seeking a higher offer from other potential bidders, the person familiar with the deal said. The absence of this provision is likely to make the deal close faster.
Some Tesla investors have bristled at Musk’s bid because they say it distracts from his responsibilities as chief executive and could slow momentum at one of the world’s most valuable automakers. And internally, Twitter employees have raised concerns about Musk’s potential effect on the culture.
Musk is very active on the platform, having tweeted more than 17,300 times. He averages 125,180 likes per tweet, according to Socialtracker. Musk has earned praise for his wide-ranging approach to the site: he toggles freely between crude memes of his rivals, polls on the state of free speech and critical business decisions.
His tweets have gotten him in trouble with the Securities and Exchange Commission: In 2018, he wrote that he had “Funding secured” to take Tesla private at $420 a share.
He said he chose the number $420 “because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend would find it funny, which admittedly is not a great reason to pick a price,” according to the federal complaint.
Some had speculated his offer price of $54.20 per share might be a joke.
