On Monday, Elon Musk agreed to buy Twitter Inc. for $44 billion in cash, transferring ownership of the social media platform used by millions of people and world leaders to the world’s richest person.
Once the transaction is completed, Twitter stockholders will get $54.20 in cash for every share of Twitter common stock. It’s a 38% premium over Twitter’s April 1 closing stock price – the last trading day before Musk disclosed his nearly 9% stake in Twitter.
In January, Musk began buying Twitter shares. He announced on April 4 that he had acquired a 9% stake in the company, making him the company’s largest individual shareholder. He began asking for modifications to the platform, such as easing the limits around what users can publish, prohibiting spam bots, and making the platform’s algorithm public.
Musk has promised to “unlock” Twitter’s potential by easing what he sees as unfair free speech limitations.
“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 said.
??♥️ Yesss!!! ♥️?? pic.twitter.com/0T9HzUHuh6— Elon Musk (@elonmusk) April 25, 2022
Musk has criticized Twitter’s moderation, describing himself as a “free speech absolutist,” and has suggested that Twitter’s algorithm for ranking tweets be made public. He also criticized the platform for giving advertisers too much control.
Since the 9% acquisition, Musk and the company engaged in a “corporate battle” in terms of the future of the company.
When Musk agreed to join the board and announced his acquisition offer, Twitter proceeded with the “poison pill,” a corporate maneuver to block takeover efforts.
The “pill,” also known as a shareholder rights plan, would have stopped Musk from buying more than 15% of Twitter shares on the open market by activating a provision that would have allowed Twitter to sell more shares, lowering Musk’s holdings value.
However, on April 20, Musk filed a securities statement revealing that he had secured $46.5 billion in finance agreements from a group of banks led by Morgan Stanley in order to finalize a potential transaction. This may have put pressure on Twitter’s board to take Musk’s offer more seriously.
“The Twitter board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” said Bret Taylor in a statement, Twitter’s chairman. – WhatALife!