Elon Musk managed to get a deal to acquire Twitter Inc. for $44 billion cash on Monday. This transaction would give the richest person in the world control over the social media giant used by millions of people, including global leaders.
Tucker Carlson's Opening Monologue On @elonmusk Buying Twitter
"Musk's purchase of Twitter is the single biggest political development since Donald Trump's election in 2016. It is certainly the most threatening challenge to the corrupt & incompetent leadership of this country." pic.twitter.com/AAfWw3zBhS
— The Columbia Bugle 🇺🇸 (@ColumbiaBugle) April 26, 2022
This is a significant moment for the social media company, which has become one of the world’s most influential public spaces on the internet and is now facing numerous challenges.
Musk has slammed the way Twitter moderates content. He intends for the site’s algorithm to prioritize tweets to be public. He also disagrees with giving corporations too much power on the platform to advertise.
Many political activists expect Musk taking over will mean less moderation and the reinstatement of individual banned accounts, including that of former Pres. Donald Trump.
The world’s richest man has also advocated changes to the service that would make it user-friendly, such as adding an edit button and cracking down on “spam bots” that sent large numbers of unwanted tweets.
Talks about the deal, which seemed to be uncertain last week, accelerated over the weekend after Musk sought the support of the company’s shareholders by providing the financing details of his offer.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk mentioned in a statement.
🚀💫♥️ Yesss!!! ♥️💫🚀 pic.twitter.com/0T9HzUHuh6
— Elon Musk (@elonmusk) April 25, 2022
Late on Monday, Twitter’s former CEO Jack Dorsey commented on the deal with Musk via a series of Tweets. In them, he thanked both Musk and the social media platform’s current CEO Parag Agrawal for “getting the company out of an impossible situation.”
“Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step,” he said.
Elon’s goal of creating a platform that is “maximally trusted and broadly inclusive” is the right one. This is also @paraga’s goal, and why I chose him. Thank you both for getting the company out of an impossible situation. This is the right path…I believe it with all my heart.
— jack⚡️ (@jack) April 26, 2022
Twitter shares went up by 5.7% on Monday, finishing at $51.70. The deal represents an almost 40# premium to the company’s closing price a day prior to Musk revealing that he had bought stakes over 9#.
Despite this, the offer is below the $70 range, the price Twitter was trading in 2021.
According to Jonathan Boyar, the managing director at Boyar Value Group, which holds a stake on the social media platform, “I think if the company were given enough time to transform, we would have made substantially more than what Musk is currently offering.”
Although, he went on to say, “If the public markets do not properly value a company, an acquirer eventually will.”
The billionaire’s move continues a tradition of rich people buying off the control of large, highly influential media platforms, such as Jeff Bezos’ acquisition of the Washington Post back in 2013.
According to Twitter, Musk managed to secure $25.5 billion worth of debt and margin loan financing. He is also providing an equity commitment worth $21 billion.
Musk mentioned that he is not mainly concerned with Twitter’s economics.
In a recent public talk, he said. “Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don’t care about the economics at all.”
Musk serves as the chief executive of both Tesla and SpaceX. It remains unclear how much time he will set aside to focus on Twitter or what steps he’ll take.
“Once the deal closes, we don’t know which direction the platform will go,” the current Twitter CEO told employees on Monday
In an email to clients, Edward Moya, an OANDA analyst, stated that the deal was “great news for Twitter shareholders as it doesn’t seem like the company was going to get things right anytime soon.”
However, he also mentioned, “Tesla shareholders can’t be happy that Musk will have to divert even more attention away from winning the EV (electric vehicle) race.”
Nevertheless, Musk’s Twitter account, which has 84 million followers, is considered an important, free PR and marketing tool for Tesla.
The deal with Twitter was approved by the company’s board and is set to be the subject of a shareholder vote. According to analysts, they do not expect any regulatory hurdles.
An analyst at Wedbush, Daniel Ives, stated that Twitter’s board of directors already had its back “against the wall” when Musk detailed what his financing package entailed and when no other bidders came forward.
Even though Twitter is 1/10 the size of larger social media platforms like Facebook, many gave it credit for helping start the Arab Spring uprising. It has also been accused of having a role in the Jan. 6, 2021 siege of the U.S. Capitol building.
Following Trump’s ban from Twitter over concerns regarding the incitement of violence after the Capitol incident, Musk said: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”
During an interview with Fox News on Monday, Trump said that he will not return to Twitter.
Meanwhile, the White House declined to comment on Twitter and Musk’s deal. However, Pres. Joe Biden has been concerned about the power and influence of social media for a while now.
White House spokesperson Jen Psaki said, “Our concerns are not new… The president has long talked about his concerns about the power of social media platforms, including Twitter and others, to spread misinformation.”