What you need to know
- Twitter will be bought Elon Musk for about $44 billion.
- The company will go private once the deal goes through.
- Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction.
Twitter has agreed to be bought for about $44 billion by SpaceX and Tesla founder Elon Musk, the company announced on Monday.
In a press release, Twitter said stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing the proposed transaction.
Upon completion of the transaction, "Twitter will become a privately held company."
"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, Twitter's Independent Board Chair.
Twitter's CEO Parag Agarwal said, "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."
The deal came a day after Twitter’s board of directors met on Sunday morning to discuss Musk’s offer to buy the social media platform. The renewed interest comes several days after Musk announced that he had secured $46.5 billion in financing for his bid.
The news also comes a week after Twitter reportedly considered adopting a “poison pill” measure to block his takeover and protect shareholders.
Earlier this month, Musk offered to buy all of Twitter’s common stock for $54.20 per share. Musk stated in a letter to the SEC that Twitter has the potential to be “the platform for free speech around the globe.” This was after the richest man in the world had bought a 9.2% stake in Twitter worth $2.89 billion. At the time, he warned that if his offer were declined, he would have a "Plan B," although he did not go into detail about what that would entail.
Musk tweeted Monday afternoon before the deal was made that he hoped “even my worst critics remain on Twitter because that is what free speech means.”
In the press release, Musk said that "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."
"I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it," Musk said.
We don't know for sure what the new Twitter will look like, but there seems to be a lot of speculation.
Alex Kantrowitz, a writer of the Big Technology newsletter, tweeted: "Don't discount the possibility of Twitter becoming a paid subscription service if @elonmusk buys it. 1) Allows for free speech 2) Less incentive for bots and trolls 3) He can actually make money."
During a Ted Talk in Vancouver shortly after Musk announced wanting to buy Twitter, he said:
"If in doubt, let the speech exist... If it’s a grey area, I would say let the tweet exist… but obviously, in a case where there is a lot of controversy, that you do not necessarily want to promote that tweet."
Alex Heath, senior reporter for The Verge, tweeted details of Twitter's all-hands meeting following the announcement of the acquisition. It's suggested that there are many uncertainties regarding the next six months until the deal is expected to close. This includes who will be CEO following the purchase and whether or not to allow Donald Trump back to the platform. According to the tweets, the Twitter board will "cease to exist" when the deal closes, but the company does not plan to cut any jobs "at this time."
