Twitter agreed to let Elon Musk buy the company in a deal valued at about US$44 billion, the company announced Monday.
Elon Musk’s acquisition of Twitter has just materialized, the release of which states that:
Twitter, Inc. (NYSE: TWTR) announced today that it has signed a definitive agreement to be acquired by a wholly owned entity from 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 private company.
The deal would put the world’s richest man in charge of one of the world’s most influential social media platforms. Musk has repeatedly emphasized in recent days that his goal is to strengthen freedom of expression on the platform and work to “unlock” Twitter’s “extraordinary potential.”
The full press release is available from this link.
A few hours ago it was just a rumor
After the release of the poisoned pill a few days ago, Twitter seemed to be reconsidering the acquisition offer made by Elon Musk, worth 43 billion dollars in cash.
The pressure exerted by shareholders to reconsider Musk’s offer more seriously has made the social networking platform think again, since the company is not being profitable enough as expected.
According to Reuters, on the basis of sources close to the operation, who have asked to remain anonymous, if the situation did not turn sour at the last minute, Twitter would announce today, Monday, after the meeting held by its executives, the acquisition agreement for 54.20 dollars per share. And so it happened.
Elon Musk, considered the richest person in the world, according to Forbes, buys the whole of Twitter in his personal capacity to introduce a series of changes in the platform to promote freedom of expression on it, being the fight against bots a part of the strategy that Musk intends to implement.
And is that Musk considers that:
‘The company will not thrive or meet this social imperative in its current form’.
And about the critics of his purchase, he notes that:
I hope even my worst critics stay on Twitter, because that’s what free speech is all about.
“Free speech is the foundation for a democracy to function, and Twitter is the digital public square where issues vital to the future of humanity are debated,” Musk said in the statement announcing the deal.
“I also want to make Twitter better than ever by improving the product with new features, making algorithms open source to increase trust, defeating spam bots and authenticating all humans,” he added.
“Twitter has enormous potential. I look forward to working with the company and the user community to unlock it.”
Bret Taylor, chairman of Twitter’s board, said the board had conducted a “comprehensive process” to evaluate Musk’s proposals for the company.
It is unclear who will lead the new company, which is currently led by Parag Agrawal, who replaced co-founder Jack Dorsey last November.
But in his offer document, Musk told Twitter’s board, “I have no confidence in management.”
🚀💫♥️ Yesss!!! ♥️💫🚀 pic.twitter.com/0T9HzUHuh6
— Elon Musk (@elonmusk) April 25, 2022
Other points where the also Tesla executive would have an impact is on the Twitter Blue subscription, enabling a price drop, in addition to encouraging payments in the same through cryptocurrencies, betting on dogecoin as a payment option.
Elon Musk proposes monetizing tweets that are viral or contain relevant information
There is no doubt that this week will mark a before and after in the social media segment for being the week in which Elon Musk finally managed to acquire Twitter for a total value of $44 billion.
The transaction is ongoing, following the process to completion. It will be after its closing that Elon Musk will get the reins of the platform that will allow him to carry out the changes to turn it into a profitable social network.
Towards Twitter’s economic profitability
In this regard, Reuters has been able to learn from close sources, who have asked to remain anonymous, that Musk has convinced the banks that have granted them the loan arguing that he will try to increase revenues, among other aspects, with the monetization of tweets that contain important information or go viral.
To this end, it proposed charging a fee when a third-party website wants to quote or insert the tweet with important information or has gone viral in its content, as long as it belongs to a verified person or organization.
This is in addition to the intentions recently shared by Musk in which he pointed to the intention to reduce the price of the Twitter Blue subscription, also banning advertising on it, and facilitating payments through the use of the cryptocurrency dogecoin.
In another tweet, which Musk himself went on to delete shortly thereafter, he also pointed to reducing reliance on advertising.
Advertising is currently the company’s largest source of revenue. On the other hand, Bloomberg News reported this past Thursday that Musk intends to reduce labor costs through job cuts, although the more concrete decision will be made once he takes the reins of the company, which will also be when he shares his business plans in more detail.
Musk has taken out a $13 billion loan on Twitter and a $12.5 billion margin loan tied to his Tesla Inc. shares, the rest of which he paid for with his own cash.
According to sources, the arguments put forward to the banks have been scarce in detail, lacking aspects such as the financial status or the number of employees of the company, so it will be seen the course that Twitter will take in practice once Musk begins to control it, for which he also has in mind who will be the new CEO to replace Parag Agrawal.
4 issues of concern about Elon Musk’s Twitter buyout
Elon Musk bought Twitter using a large part of his fortune, $44 billion, a good chunk if we take into account that Musk’s total amount of money is between $200 and $250 billion.
The fact is that Elon Musk says he wants to transform Twitter into the pillar of freedom of expression on the Internet, and that is raising several concerns. Amnesty International has already spoken out, with two words “Toxic Twitter”. In the same thread it says:
We are concerned about any steps Twitter may take to erode the enforcement of policies and mechanisms designed to protect users.
Among the main fears we have:
- That abusive speech against certain sectors of the population will be allowed. Open bullying.
- Inciting hatred, which is why Trump’s account was deleted at the time. By the way, Trump has already said that even if they let him back on Twitter, he will not return.
- May, as actress Jameela Jamil said, Twitter become an even more anarchic, hateful, xenophobic, bigoted and misogynistic space.
- That millions of users will leave the network (there are already many who have done so).
These are reasonable fears, but we still don’t know exactly what Elon Musk means by “freedom of speech”. It’s one thing to openly express an opinion on any issue, it’s another to threaten and transform the network into a hell for any decent person. Personally I doubt very much that Elon Musk will make radical changes.