Elon Musk wins $ 44 billion acquisition of Twitter

Billionaire provocateur Elon Musk bought Twitter, leaving the main social media platform in the hands of the impulsive leader of two other companies, SpaceX and Tesla.

Musk and his followers pay $ 54.20 Cash per share. Once the deal is concluded, Twitter will become a private company. When Wall Street first received the news, Twitter’s shares were up nearly 6% during the close. They’ve risen nearly 30% since Musk officially took the stage.

The terms were reached today after Musk announced his initial $ 43 billion offering to the company. Although he described it as the “best and final” offer, with the parties meeting for talks over the weekend, the Twitter board decided the final valuation was too big to resist.

The purchase raises a number of questions and is followed by Twitter’s enactment of the “poison pill” arrangement, which was intended as a defense mechanism after Musk’s unwanted offer surfaced. The event is intended to flood the market with stocks at a time when Musk’s stake exceeds 15% of the company, which could undermine his control and keep Twitter’s current shareholders and board members in check.

Aside from the details that are directly related to the acquisition, there are also broader questions about Twitter’s strategy from here. Musk called himself “absolute freedom of expression” and criticized Twitter’s practice of moderating content. The platform rejected a statement from former President Donald Trump after writing a warning on his Twitter account about violence and promoting undemocratic ideas following the January 6 attack on the United States Capitol.

Founded in 2006 as one of the first social media readers originally focused on sharing short texts, Twitter has grown to reach 217 million daily active users. But its business model is under pressure. It relies heavily on advertising for its growth, but is less effective than its peers like Facebook (now Meta Platforms) or Snap Inc.

Musk, along with his other Twitter complaints, has targeted a company-centric model of ads that he says would encourage zombie accounts, bots, and other unwanted content. As a private company, Twitter arguably has more freedom to experiment with possible subscription models and also welcomes the return of Trump and others who have downloaded what they have posted on Twitter from the platform.

“Twitter’s board of directors has embarked on a thoughtful and comprehensive process to evaluate Elon’s proposal, with a focus on value, accuracy and funding,” the company’s independent board chairman said in a statement. “The proposed transaction will give us a significant cash bonus and we believe this is the best way forward for Twitter shareholders.

parag agravali, who took over as Twitter CEO a few months ago after co-founder Jack Dorsey stepped down, noted the company’s “purpose and relevance” around the world. “We are deeply proud of our teams and inspired work has never been more important,” he said.

“Freedom of expression is the foundation of a functioning democracy and Twitter is a digital town square that addresses issues vital to the future of humanity,” said Musk. “I also want Twitter to be better than ever by improving the product with new features, building trust in open source algorithms, defeating spam bots and authenticating everyone. “Twitter has great potential – I’m looking forward to working with the company and the consumer community to unlock it.”

Although Musk is considered the richest man in the world, much of his wealth is tied to stocks, which is why many behind-the-scenes negotiations have taken place with lenders who could help him fund the deal. finally supplied 25.5 billion dollars Debt and full margin loan financing and equity commitment 21 billion dollars. According to the official press release, the closing of the transaction is not accompanied by any financing conditions.

Twitter said it will include more information about the terms of the deal in a future filing with the SEC. The company also noted that the first quarter financial results report will continue as scheduled on Thursday. In the wake of Musk’s news, the company refuses to hold a regular conference call with Wall Street analysts.