The rumors were true: Twitter has accepted Tesla CEO Elon Musk’s $44 billion offer to take over and privatize the entire company.
Twitter and Elon Strike the Deal
According to the Wall Street Journal, Twitter worked through the night hashing out the deal, which polarized many over the ethics of such a hostile takeover of a social media giant.
Initially, Twitter appeared to lean against the offer, with a major Saudi Arabian investor (and prince) rejecting Musk’s bid in mid-April. At the time, he claimed it did not match Twitter’s “intrinsic value” or “growth prospects”.
In response, Musk countered with a question about his company’s views on journalistic freedom of speech. This, after all, has been his primary motivation for acquiring Twitter, which he said could be the “platform for free speech around the globe” in his SEC filing two weeks ago.
“I hope even my worst critics remain on Twitter, because that is what free speech means,” he tweeted on Monday.
The Tesla CEO’s offer was a 38% premium over Twitter’s stock price prior to him revealing his 9.2% stake in the company earlier this month. He reportedly secured $46.5 billion for the buy last week – $25.5 billion from a debt and margin loan, and another $21 billion of his own equity.
Twitter’s stock has since risen to $51.60 at the time of writing – nearly matching his proposal for $54.20 per share. Today alone, the company is up 5% on the NYSE.
Nevertheless, Twitter’s independent Board Chair Bret Taylor called the purchase “the best path forward for Twitter’s shareholders” in a press release.
Dogecoin – Elon Musk’s favorite cryptocurrency – has also rallied a dramatic 26% today, on rumors that the Twitter deal was being finalized.
Elon Musk in Control
Musk had originally planned to join Twitter’s board of directors, but backed out once he realized this would cap his ownership stake at 14.9%. Now having secured total control of the company, he plans to shower it with various improvements besides decreased censorship:
“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans,” he stated.
Twitter’s founder and former CEO Jack Dorsey is also a big fan of open-source programming. He expressed support for Elon buying Twitter last Friday, but said that media should ideally be an “open and verifiable protocol”.