Saturday, April 1

Twitter accepts Elon Musk buyout offer

Twitter has agreed to sell itself to Elon Musk, the world’s richest man, in a $44 billion deal.

Musk has signaled that Twitter will be overhauled at his direction, including changes to content moderation, having described himself as a “free speech absolutist.”

The deal comes after intense speculation about Twitter’s future, sparked by Musk’s entry as the platform’s largest single shareholder on April 4. On April 14, Musk announced a $43 billion takeover offer, prompting Twitter’s board of directors to voice their displeasure.

However, the board’s apparent unease faded after Musk submitted a $46.5 billion financing package for the deal, including $21 billion of his own money.

The deal is not expected to face critical scrutiny from US competition authorities because Musk’s main business interests – Tesla and SpaceX – do not compete with Twitter.

However, the operation is likely to draw comment from politicians and opinion-makers, given Twitter’s influence as a source of information and Musk’s stance on freedom of expression.

the chronology

Two weeks ago it became known that Elon Musk now owns 9.2% of Twitter, making him its largest shareholder. Shortly after, CEO Parag Agrawal announced that Musk, as one of the “most passionate users and at the same time a great critic”, would join the board of directors to actively shape the future of the company. This, he said, was the best way to go.

However, on April 9, the day designated for entry, Musk unexpectedly announced that he did not want to take the job. This was “for the best” (that he could get), Agrawal said, in clear contradiction to his own statements from the previous week.

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No further background details were disclosed, but a suggestion by Agrawal that all board members should act in the company’s interest could be interpreted as evidence of differences of opinion with Musk: he believed that Musk was going to act in the best interest of the company. In parallel, Musk asked “Is Twitter dying?” via Twitter just a day earlier, referring to the inactivity of the larger accounts.

Musk made a mandatory filing with the US Securities and Exchange Commission, according to which he was offering $54.20 per share for 100% of the shares.

Musk’s intentions are to take full control of the company and then take it off the stock market. In his opinion, only in this way is it possible to continue with Twitter’s function as a global platform for the preservation of freedom of expression. He also does not trust the management of the company.

As a lone member of the board of directors, Musk did not see himself in a position to change anything. With the acquisition of him, he aspires to “unlock the full potential of the platform”, or in other words, to impose his own criteria on the direction the social network takes.

Twitter’s board of directors has unanimously approved Musk’s proposed full takeover of the platform. Musk’s offer was apparently seen by a large portion of shareholders as more lucrative than keeping the shares on the open market.

Twitter cannot force the rest of the shareholders to sell their shares in the company at the price of $54.20. But with the shares being sold to Musk by major shareholders, holding the shares no longer makes sense for small private investors. As Musk has already announced, Twitter will delist after all shares have been purchased by a company it owns.

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In the press release about the announcement, Musk again underlines his goals: He wants to strengthen and preserve freedom of expression as the backbone of democracy on Twitter, improve the product by introducing new features, reveal the source code for selecting posts on Twitter, Twitter feed to build trust and permanently ban spambots from the platform.

“Freedom of expression is the foundation of a functioning democracy, and Twitter is the digital plaza where vital issues for the future of humanity are debated. I also want to make Twitter better than ever by improving the product with new features, making the algorithms open source to increase trust, defeating spam bots, and authenticating all humans. Twitter has enormous potential. I’m looking forward to working with the company and the user community to unlock it,” says Elon Musk.

The acquisition will cost Elon Musk about $44 billion. $21 billion will be paid out of his own pocket, and another $25.5 billion through credits and loans.

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