Twitter accepts Elon Musk’s offer to buy the company for a $ 44 billion deal

Twitter Inc.

TWTR 5.66%

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

The $ 44 billion deal marks the end of a dramatic courtship and a heartbreak 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, with Mr Musk planning to take Twitter privately.

Elon Musk on Monday signed a deal to buy Twitter for about $ 44 billion, moving the world’s richest man one step closer to taking control of the social media platform. Photo: Ryan Lash / TED / AFP / Getty Images

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, including possibly reshaping how billions of people use social media. Mr. Musk will bring its commitment to a more hands-off approach to speech to a company that has struggled to reconcile freewheeling conversations with content that appeals to advertisers.

On Monday, a day after The Wall Street Journal first reported that a deal was imminent, Mr Musk tweeted to indicate that he wants the platform to be 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.

Mr. Musk said after the deal was announced that he wants to make Twitter a better user experience, in part by adding new features and fighting spam. The billionaire who is also the top executive of Tesla Inc.

and Space Exploration Technologies Corp., have experience with challenging conventions in various industries.

Among the controversial questions Mr. Musk will face is whether he will allow Donald Trump back on Twitter after the former president’s personal account was “permanently suspended” by the company last year in the wake of the January 6 violence. in the US Capitol. Mr. Trump told Fox News on Monday that he had no plans to return to Twitter, and would instead use his startup Truth Social social network as his means of reaching followers.

Twitter employees responded Monday – often on the company’s own platform – with a mix of fears about what Mr Musk’s leadership might bring, and some excitement about the potential for change ahead. Bret Taylor, Twitter’s independent chairman of the board, said the deal reflects the best outcome for shareholders.

“Twitter has a purpose and relevance that affects the entire world,” Parag Agrawal, Twitter’s CEO, said in a statement. “Deeply proud of our teams and inspired by the work that has never been more important.”

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 came, 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 about 6% in afternoon trading on Monday. Twitter has been an anemic stock market in an era of huge returns for technology companies. Its shares jumped on their first trading day in 2013 to close at $ 44.90, within a dollar of where they were more than eight years later, when Mr. Musk made his approach.

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

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.

Taking Twitter private would allow Mr Musk to make changes without the scrutiny public companies are typically under from their shareholders. He has also said he wants to retain as many shareholders as possible.

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 aimed 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 headquarters in San Francisco. There is vigilance among the employees around the proposed takeover.


Photo:

David Paul Morris / Bloomberg News

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 also introduced new features that have gained some traction with 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.

The company said Monday it would no longer hold a conversation with analysts that day.

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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