Elon Musk is going to buy Twitter. The CEO of Tesla and SpaceX, as well as the social media company, announced the deal on Monday, with the company accepting an offer worth approximately $44 billion officially. Let’s see more about why was Twitter sold to Elon Musk.
Once the transaction is completed, the world’s richest person will own arguably the most influential social platform in the world, even though Twitter is significantly smaller in terms of business and user base than companies like Facebook or TikTok.
“The Twitter Board conducted a thoughtful and comprehensive process to evaluate Elon’s proposal, with a deliberate focus on value, certainty, and financing,” said Bret Taylor, the company’s independent board chair, in a statement announcing the deal.
“The proposed transaction will result in a significant cash premium, and we believe it is the best way forward for Twitter’s stockholders.”
Twitter sold to Elon Musk, Musk stated at a conference that he made the offer to buy Twitter because it had “become kind of the de facto town square, so it’s just really important that people have the reality and perception that they can speak freely within the bounds of the law.” “This is not a way to make money,” he added. My gut feeling is that having a public platform that is supremely trusted and broadly inclusive is critical to the future of civilization. “I’m not interested in economics at all.”
“Free speech is the bedrock of a functioning democracy,” Musk said in a statement Monday, “and Twitter is the digital town square where matters vital to humanity’s future are debated.”
“I also want to make Twitter better than ever before by improving the products with innovative features, making the algorithms open source to increase trust, defeating spambots, and authenticating all humans,” he added. Twitter has enormous potential, and I am excited to work with the company and the user community to realize it.”
When the deal is completed, he will be forced to make his admittedly hazy ambition a reality while contending with a difficult regulatory environment, not to mention human nature.
The transaction caps off a volatile and unpredictable few weeks for the company, with the likelihood of a purchase changing almost daily.
Musk quietly began purchasing Twitter shares in January but did not reveal his 9.1 percent stake until early April. Musk, an active Twitter user who used the service to solicit and suggest ideas for its future, was offered a seat on the company’s board, but he declined, forcing Twitter’s new CEO, Parag Agrawal, to warn employees of “distractions ahead.”
Just a few days later, Musk made an offer to buy Twitter for $43 billion, texting board chair Taylor: “Twitter has extraordinary potential.” “I’ll unlock it.”
With the offer conditional on Musk obtaining financing, the company implemented a “poison pill” strategy to force negotiations and slow down the hostile takeover effort.
Musk made a more contract proposal to the company on April 21, having secured the necessary financing. He also stated that if negotiations did not begin, he would consider making a tender offer.
With the funding secured, Twitter had little reason not to engage in direct talks with Musk. And those discussions eventually resulted in an agreement.
Twitter expects the transaction to close this year, subject to shareholder and regulatory approval. It also stated that there are no financing requirements for the transaction to close.
In making the announcement, Agrawal added a somewhat somber comment of his own: “Twitter has a purpose and relevance that impacts the entire world.” We are extremely proud of our teams, and we are inspired by the work that has never been more important.”
Late Monday, Twitter founder Jack Dorsey, who stands to receive a $978 million cash payout if the deal goes through, tweeted: “The idea and service are all that matters to me, and I will do whatever it takes to protect both.” Twitter as a company has always been my only problem, as well as my greatest regret. Wall Street and the advertising model have owned it. The correct first step is to take it back from Wall Street.”
What impact will Musk’s deal have on Twitter users?
Experts are still puzzled as to what Musk intends to do with Twitter.
On Monday, Wedbush Securities analyst Dan Ives told USA TODAY that he expected a deal to be completed 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’s back was against the wall once Musk detailed his $46 billion in financing last week to put pen to paper on this deal,” Ives said. “We do not anticipate any major regulatory obstacles to the deal being completed, as this soap opera now concludes with Musk owning Twitter.”
Ives went on to say that the Twitter board bought some time with the “poison pill,” but that they eventually had to sit down with Musk to work out a deal because “the clock struck midnight on Twitter’s history as a public company.”
According to Scott Kessler, Third Bridge’s global sector lead for technology media, “it appears that major changes are ahead for Twitter if Musk succeeds, but the specifics at this point are pretty lacking.”
“Musk has tweeted about the value of free speech and the existence of an ‘edit button,'” Kessler added. “He wants Twitter users with large followings to become more active on the platform. He prefers subscriptions to advertise for monetization.”
In a statement, Angelo Carusone, president of Media Matters for America, a politically left-leaning nonprofit media watchdog group, said Musk’s purchase of Twitter would be a “victory for disinformation and the people who peddle it.”
Carusone believes Musk has the potential to “unleash a wave of toxicity and harassment,” undoing Twitter’s efforts to increase quality engagement and make the platform safer for users.
“Handing Musk the keys to Twitter will undoubtedly unleash the conspiracy theories that the platform has tried to suppress, and any attempt to use the platform for legitimate sharing information will be overshadowed by a toxic cesspool of misinformation,” Carusone said.
“The only thing worst than the Twitter re-platforming the likes of Donald Trump and Alex Jones – as well as reversing course in interacting with disinformation and extremists – is the perverse pressure it’ll put on other major social media platforms, effectively igniting a race to the bottom,” he continues.
I hope we’ve resolved all the doubts about about Twitter sold to Elon Musk!
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