Billionaire businessman Elon Musk agreed to buy Twitter for $44 billion, using one of the largest leveraged acquisitions in history to put the 16-year-old social networking platform at the center of public discussions. and become the focus of the debate about freedom of expression online.
Investors will receive $54.20 for each Twitter share they own, the company said in a statement Monday. Price is 38% higher than the stock’s closing price in April first, the last business day before Musk revealed a substantial stake in the company, triggering a stock rally. Twitter sharing has been paused for the news.
Musk, one of Twitter’s most prolific users with more than 83 million followers, began accumulating about 9% of his shares in January. In March, he voiced his criticism of Twitter, alleging that the company’s algorithms were biased and the feed was cluttered with automated spam posts. He also suggests that Twitter’s user growth has been inflated by bots. After turning down an invitation to join the company’s board, on April 14, he suggested going private on Twitter, saying he would make the platform a bastion of speech. freely and make other suggestions about the changes he will make as owner.
Ideas range from the real – for example, allowing users to edit tweets and combat the spread of bots – to the extraordinary, such as the proposal to turn the company’s headquarters in San Francisco a shelter for the homeless.
“Freedom of expression is the cornerstone of a working democracy, and Twitter is the digital town square where issues important to the future of humanity are debated,” Musk said in the statement. on Monday. “Twitter has huge potential – I look forward to working with the company and the user community to unlock it.”
The deal has been unanimously approved by the company’s board of directors and is expected to be completed by the end of this year. Musk has secured $25.5 billion in debt and margin loan financing and will provide approximately $21 billion in equity to fund the deal, according to the statement.
Going private marks a dramatic shift for a company that started out as a messaging service to share your status updates with friends, but quickly evolved into a way for people to grow short posts of 140 characters or less for the public to follow. Twitter has caught the attention of politicians, celebrities and journalists, and has taken its place alongside social media rivals Facebook and YouTube as the standard tool of a new way. , more interactive to use the web called Web 2.0.
Following its birth in 2006, the company weathered a series of crises, including the management upheaval that led to co-founder Jack Dorsey’s removal in the early days of Twitter and the eventual return of Twitter. Mr. in 2015. After the initial public offering in 2013, the company considered selling. in 2016, attracting the interest of companies from Disney to Salesforce. In 2020, Dorsey was entangled with an activist investor that caused Twitter to set specific growth goals and add board accountability. That served as the catalyst for Dorsey’s eventual second departure so he could focus on his other company, digital payments firm Block, Inc.
As recently as last week, it was still unclear whether Musk’s bid would be successful. The 50-year-old billionaire himself mused before a TED event the day it was announced, and even he was skeptical about its prospects. Although the stock initially spiked on news of Musk’s stake in the company, the stock has been trading well below its initial asking price of $54.20 since the announcement – an indication that investors doubt that a deal will materialize.
Twitter on April 15 approved a shareholder rights plan – a measure seen as a poison – to combat unwanted bidders. This plan is possible if one party buys back 15% of the shares without prior approval and seeks to ensure that anyone takes control of the social media company through open market accumulation. are paying all shareholders the appropriate control fee, the company said in disclosing the plan.
But a turning point came last week when Tesla The CEO put together a funding plan that included 12 banks, headed by Morgan Stanley. Just days after revealing the plans, Musk met with Twitter executives as the company became more receptive to a deal, a person with knowledge of the matter told Bloomberg News. on Sunday.
