Elon Musk’s buyout offer has been accepted by Twitter. Musk is paying $54.20 per share, or approximately $44 billion, for the social media giant.
Tesla CEO Elon Musk announced plans to take the company private, as well as to improve Twitter by protecting free speech, open-sourcing algorithms, combating spam bots, and “authenticating all humans.”
The acquisition was approved unanimously by Twitter’s board of directors. The transaction is expected to close in 2022, subject to approvals from both regulators and shareholders.
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Musk’s decision follows a flurry of activity. In early April, Tesla CEO Elon Musk purchased a 9.2 percent stake in Twitter in response to criticism of the social media company’s free speech policies.
He claimed Twitter was failing to fulfill its role as a “de facto public town square.” Twitter quickly announced Musk’s intention to join its board of directors, but the tech executive backed out a few days later.
While he did not explain why he changed his mind, the board appointment would have prevented him from owning more than 14.9 percent of the company — he would not have been able to take control during his term.
To avoid a hostile takeover, Twitter initially exercised caution and implemented a “poison pill” share strategy. It did, however, reportedly take a second look at Musk’s final offer this weekend.
Finer details, such as financial guarantees if the purchase falls through, are thought to have been worked out at the last minute by the two parties. Twitter’s independent board chair, Bret Taylor, stated in the announcement that the company agreed to the buyout after a review process focused on “value, certainty, and financing.”
Elon Musk is still dealing with the fallout from this decision, including an SEC investigation into insider trading and a class action lawsuit accusing him of defrauding shareholders by delaying his Twitter investment disclosure.
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The Twitter buyout will not help him avoid this scrutiny. It won’t be surprising if the social network takes a significant turn, which means Musk is now competing with Meta, Snap, TikTok (that is, ByteDance), and other social networking heavyweights.
We’d add that Twitter’s employees may be dissatisfied as well. According to The New York Times, employees were largely kept in the dark about the deal, which threw their stock compensation plans into disarray.
They were also concerned that Musk would undo years of work to combat “toxic” material. According to insiders, some are excited, but there is a chance that some Twitter employees will object to any significant changes in direction.
Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important. https://t.co/5iNTtJoEHf
— Parag Agrawal (@paraga) April 25, 2022
Here’s the note Twitter CEO @paraga just sent employees. Company all-hands scheduled for 2 pm PT to discuss Elon Musk buying the company pic.twitter.com/3WobiWovt5
— Kurt Wagner (@KurtWagner8) April 25, 2022
