The world’s richest man has struck a multi-billion dollar deal with Twitter’s board to take control of the social media website
(Photo: Britta Pedersen-Pool/Getty Images)
Elon Musk has bought social media website Twitter in a multi-billion dollar deal.
Twitter’s board has confirmed a deal has been reached with the South African businessman after takeover rumors spread on Monday (April 25).
Just days after it was announced that Tesla and SpaceX boss Elon Musk had acquired a 9% stake in Twitter, the billionaire offered to buy the social media platform outright.
Following the announcement of the Tesla CEO’s bid, Twitter management declared a “poison pill” strategy to avoid a hostile takeover.
However, the financial details of Musk’s offer, which were revealed to US regulators on Thursday (April 21), prompted Twitter’s 11-member board to seriously explore a deal.
Now they have confirmed that shareholders will be asked to accept Musk’s offer.
Here’s everything you need to know about it.
How much did Musk pay to buy Twitter?
A deal has been struck between Musk and Twitter for around $44bn (£34.5bn), with Musk offering to buy “100% of Twitter for $54.20 (£70.80) per share in cash “.
Funding would come from Morgan Stanley and other financial institutions – other banks involved include Barclays, Bank of America, Societe Generale, Mizuho Bank, BNP Paribas and MUFG.
Morgan Stanley is one of Twitter’s largest shareholders, behind Vanguard Group and Musk.
Musk said $13bn (£10bn) of funding came from Morgan Stanley and the other banks, up to $12.5bn (£9.6bn) would be loans backed by his Tesla stock, and pledged $21bn (£16bn). billion) in equity, “directly or indirectly” from him, although he did not specify what the source of those funds would be.
Musk is the richest man in the world, according to Forbes, with a fortune of nearly $279bn (£214bn).
But Musk’s actions since buying a 9% stake in Twitter have also been described by an expert as a demonstration that he shouldn’t take control of the company.
Mike Rhodes, managing director of mobile marketing company ConsultMyApp, said: “It would be just ridiculous for Twitter to accept this offer and put themselves in the hands of someone who has demonstrated their sporadic nature over the past two weeks. “
Why did Musk buy Twitter?
Earlier this month, alongside the announcement that Musk had purchased a 9% stake in Twitter, it was also revealed that he would be joining the board.
But a few days later, Twitter chief executive Parag Agrawal confirmed that Musk had changed his mind.
In a statement released following the confirmation of his accepted offer, Musk said, “Free speech is the foundation of a functioning democracy, and Twitter is the digital public square where issues vital to the public are debated. future of mankind.
“Twitter has enormous potential – I look forward to working with the company and the user community to unlock it.”
Who owned Twitter?
There are many shareholders in Twitter Inc., so no one owns the entire company.
It is a “public” company because its shares are publicly available on the stock exchange, whereas it would be a “private” company if only a few people or groups owned it.
According to the Wall Street Journal, the group with the largest stake is Vanguard Group, an American investment company that is one of the largest in the world.
Vanguard Group is believed to own 82.4 million shares of the company, or 10.3% of the company, as of April 15.
Musk is the company’s second largest shareholder. He owns 9.2% of Twitter Inc. with its 73.5 million shares.
The remaining shares are held by various financial institutions, including Morgan Stanley and BlackRock Inc.
Jack Dorsey, the original co-founder and former CEO of Twitter, currently owns 2.25% of the company.
What would Elon Musk’s Twitter look like?
Musk is well known for his belief in absolute freedom of speech and has suggested he doesn’t think Twitter is upholding his principles on the issue.
But a Twitter policy change initiated by Musk to loosen rules around speech on the site could create more problems for the company in an era of increasingly polarized online speech.
In his statement, he said: “I [also] want to make Twitter better than ever by enhancing the product with new features, making algorithms open source to increase trust, defeating spambots, and authenticating all humans.
An expert said Musk’s own tweeting history could get in the way of the delicate balancing act of content moderation that Twitter is currently engaged in.
“Sowing the seeds of advocacy for ‘free speech’ is one thing, but let’s not forget that Elon’s view of simply speaking his mind has been seen as reckless by regulators in the past,” said Dan Lane, lead analyst at Freetrade stock trading and investing app. .
Musk has previously run into trouble with US regulators the Securities and Exchange Commission (SEC) over his own tweets, after he was accused of breaking trade rules by tweeting about his business interests.
He was also accused of tweeting misinformation about Covid-19 after posting in March 2020 that children were “essentially immune” to the disease.
Musk’s attitude towards free speech is shared by the likes of Donald Trump and a number of other right-wing politicians who have had their accounts suspended for breaking Twitter’s content rules, but claim to have been victims of censorship.
Some believe a Musk takeover could mean a return to the platform for Trump and others, but reinstating those users would be a highly controversial move and could bring closer scrutiny of the company and its his approach to moderation.
Infamous British cave explorer Vernon Unsworth sued Tesla co-founder after calling him ‘pedo guy’ and ‘sus’ (suspicious) on Twitter in spat after Thai cave rescue in July 2018.
Unsworth lost the case after Musk’s lawyers argued it was just a playground slur and did not amount to an allegation of pedophilia, to which a jury agreed.