Elon Musk agrees to buy Twitter for $ 44 billion

Twitter Inc.

TWTR 6.21%

on Monday, Elon Musk accepted the offer to take over the company, giving the world’s richest man control over the influential social network, where he is also among its most powerful users.

The $ 44 billion deal marks the end of a dramatic courtship and a sharp change of heart on Twitter, where many directors and board members were initially opposed to Mr Musk’s takeover approach. The deal has polarized Twitter employees, users and regulators over the power-technology giants that have to determine the parameters of acceptable discourse on the Internet and how these companies enforce their rules.

The two sides worked through the night to bring an agreement to life. Earlier Monday, The Wall Street Journal reported that Twitter and Mr. Musk had reached an agreement on Twitter’s value.

The takeover, if passed, will mark one of the biggest acquisitions in technology history and is likely to have global consequences in the coming years related to how billions of people use social media. Musk, who is also the CEO of Tesla Inc.

TSLA -1.60%

and Space Exploration Technologies Inc., must find a way to balance its commitment to less moderation with the business needs of a company that has struggled to reconcile free-spin conversations with content that appeals to advertisers.

On Monday, after the Journal reported that a deal was imminent, Mr Musk tweeted to indicate that he wants the platform to remain a destination for broad discourse and disagreement.

“I hope even my worst critics stay on Twitter, because that’s what free speech means,” he wrote.

The San Francisco-based social media company was expected to reject the offer, which Mr. Musk made on April 14 without saying how he would pay for it.

Twitter, a day after the unsolicited offer, adopted a so-called poison pill, designed to make it harder for Mr Musk to reach more than 15% of the shares in the company.

Twitter changed its position after Mr. Musk detailed elements in its financing plan for the acquisition. On April 21, he said he had $ 46.5 billion in funding. Twitter shares rose sharply and business leaders opened the door to negotiations.

Twitter shares were ahead more than 5% in afternoon trading on Monday.

The potential turnaround on Twitter comes after Mr Musk on Friday met privately with several shareholders in the company to celebrate the benefits of his proposal, while reiterating that the board has a “yes-or-no” decision to make , people familiar with the discussions said.

Mr. Musk, with over 82 million Twitter followers, has long used the platform to express his views on everything from space travel to cryptocurrencies. In January, he began buying Twitter shares and became the largest single investor with a stake of more than 9% in April.

He has previously used Twitter to escalate a conflict with the Securities and Exchange Commission after the agency opened an investigation into some of his recent stock sales, and he often blows up his critics on the social network.

Twitter invited at the beginning of the month Mr. Musk to join the board of directors – which would have prevented him from owning more than 14.9% of the company’s shares. Mr. Musk initially agreed and then declined the offer.

Twitter has already launched a turnaround plan after a fight with activist Elliott Management Corp. about two years ago. Twitter said just over a year ago that it would work to at least double its revenue to $ 7.5 billion by the end of 2023 and reach at least 315 million so-called revenue-generating daily active users by that time.

Musk’s proposed changes to the platform include softening its stance on content moderation, creating an edit feature for tweets, making Twitter’s open source algorithm – which would allow people outside the company to view it and suggest changes – and trust less advertising, i.a. other ideas.

Mr. Musk, a self-described “freedom of speech absolutist,” said in a recent interview at a TED conference that he sees Twitter as “de facto city square.”

Twitter should be more careful when deciding to remove tweets or permanently ban users’ accounts, said Mr. Musk and pointed to temporary suspensions as a better solution.

Mr. Musk said he also wants the platform to be more transparent when taking action that enhances or reduces the reach of a tweet. He said he was not sure how some of these ideas would be implemented.

Twitter has spent years advocating for a healthier discourse on its platform and adding content moderation, arguing at least in part that it’s good for business.

The company has also introduced new features that have gained some acceptance among users, including Twitter Spaces, which allow people to host live audio conversations with each other on the platform.

Sir. Musk has said he wants Twitter to rely less on advertising – which delivered about 90% of its revenue in 2021 – and move its business model more towards subscriptions. The platform currently offers a subscription-based service called Twitter Blue, which provides customers with premium features like “undo tweet” for $ 2.99 a month. He suggested removing all ads on Twitter as part of the subscription offers.

Mr. Musk also hovered the idea of ​​cutting staff, closing the company’s headquarters in San Francisco and not giving the board a paycheck. The latter alone could save about $ 3 million a year, he said.

His other proposed changes for Twitter include attempts to stop spam and scam robots and allow longer tweets. The current limit is 280 characters.

On Thursday, Twitter is scheduled to announce its first-quarter results.

Write to Cara Lombardo at cara.lombardo@wsj.com, Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com and Georgia Wells at georgia.wells+1@wsj.com

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