Elon Musk to Acquire Twitter in a Deal Worth $44 Billion

Elon Musk to Acquire Twitter in a Deal Worth $44 Billion

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The prolific Twitter user and Billionaire CEO of Tesla and SpaceX Elon Musk, has reportedly struck a deal worth $44 billion with Twitter board and could take over very soon; once the deal is completed, Twitter will be a privately owned company.

Mr. Musk, for a long time, has been one of the leading critics of Twitter and its policies; earlier this year, he suggested building a social media app where the right to free speech could be more respected. In his quest for a free speech policy, Mr. Musk last week lined up $46.5 billion in financing to buy Twitter, leaving the board and management in confusion on how real his intentions were and whether the deal could fairly value the company.

According to the announcement from Twitter, Mr. Musk will pay $54.2 a share to take the social media company private, which gives him the company for about $44 billion.

However, Mr. Musk has vowed to unlock the social media app potential by loosening what he sees as unfair restrictions on free speech policy.

“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,” he said in the announcement Monday.

January this year, Mr. Musk started accumulating shares from the company, and on April 4, he announced that he was going to be the biggest shareholder in the company; following this, he called for changes to the platform, including loosening its rules over what users are allowed to post, banning bots that post spam, and making its algorithm public. His bid to buy the company came as a shock to the board, as they were worried about how he would finance it; following his further negotiation, Bret Taylor, Twitter’s Independent Board Chair, in a statement, said:

“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,”

How Will This Deal Affect Twitter

Following the announcement of this deal, experts have been trying to figure out how this will affect Twitter; Wedbush Securities analyst Dan Ives told media on Monday thought that a deal would get done within the next 24 hours, if not sooner.

“It all came down to no other bidders or white knights emerging in the (Mergers and Acquisitions) process, and Twitter’s Board back was against the wall once Musk detailed his $46 billion in financing last week to get pen to paper on this deal,” Ives said. “We do not expect any major regulatory hurdles to the deal getting done as this soap opera now ends with Musk owning Twitter.”

Ives added that the Twitter board bought some extra time with the “poison pill” but ultimately had to get to the negotiation table with Musk to get this deal done as “the clock struck midnight on Twitter’s history as a public company.”

Scott Kessler, global sector lead for technology media at Third Bridge, said in a statement that “it seems that major changes are ahead for Twitter if Musk succeeds, but the specifics at this point are pretty lacking. 

“Musk has tweeted about the importance of free speech and an ‘edit button,’” Kessler added. “He wants people with big Twitter followings to become more active on the platform. He favors monetization through subscriptions versus advertising.”

Angelo Carusone, the president of Media Matters for America, a nonprofit media watchdog group, said in a statement that Musk buying Twitter would be “a victory for disinformation and the people who peddle it.” 

Carusone believes that Musk could “unleash a wave of toxicity and harassment” and undo Twitter’s efforts to increase quality engagement and attempts to make the platform safer for users.

“Handing Musk the reins to Twitter will undoubtedly unleash the conspiracy theories that the platform has attempted to squelch, and any attempt to use the platform for legitimate information sharing will be overshadowed by a toxic cesspool of misinformation,” Carusone said.

He furthered that, “The only thing worse than Twitter re-platforming the likes of Donald Trump and Alex Jones — as well as reversing course in dealing with disinformation and extremists — is the perverse pressure it’ll create on other major social media platforms, effectively igniting a race to the bottom.”  

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