Elon Musk’s Twitter- Twitter is finally owned by Number One Billionaire
The board members of Twitter have agreed to a $44bn (£34.5bn) takeover offer from the billionaire Elon Musk. Now its Elon Musk’s Twitter.
Elon Musk, who made the surprise bid less than two weeks ago, said Twitter had “massive potential” that he would like to unlock.
He also called for changes from relaxing its content restrictions to eradicating fake accounts.
The firm initially overlooked Mr. Musk’s offer, but it will now request shareholders to vote to approve the deal.
According to Forbes magazine, Mr. Musk is the world’s richest person, with an estimated net worth of $273.6bn, primarily due to his shareholding in electric vehicle maker Tesla, which he runs. He also owns the aerospace firm SpaceX.
Mr. Elon Musk has more than 80 million followers on Twitter and has a controversial record on the platform himself.
In 2018 US financial regulators charged him with misleading Tesla investors with his tweets and claims that it was settled for $40 million, which Mr. Musk continues to deny.
And in 2019, he was hit with a defamation case – which he successfully beat – after calling a diver involved in rescuing schoolboys in Thailand “pedo guy” on the platform.
On Monday, Mr. Musk, known to dispute with reporters and block critics, suggested that he saw Twitter as a forum for debate.
Can Musk turn Twitter around?
As part of the takeover of Twitter, which is expected to close later this year, Twitter’s shares will be delisted and taken private.
Mr. Musk has proposed that this will give him the freedom to make the changes he desires to the business.
Among other ideas, he has proposed allowing longer posts and introducing the ability to edit them after getting published.
Twitter shares on Monday closed with an increment of more than 5% higher after the deal was announced.
But the price stays lower than Elon Musk’s $54.20 per share offer, a sign that Wall Street thinks he is overpaying for the firm.
Elon Musk said that he doesn’t care regarding the finances of the buy. However, he will take on a company with good and bad financial performance records.
Despite its power, Twitter has rarely turned a profit, and user growth has slowed, particularly in the US.
The company was founded in 2004 and ended in 2021 with $5bn in revenue and 217 million daily users globally – a fraction of the figures claimed by other social media platforms such as Facebook.
Bret Taylor, chair of Twitter’s board, said it had fully considered Mr. Musk’s offer, and it was the best path for Twitter’s stockholders.
It is not clear who will direct the company moving forward. Twitter is currently led by Mr. Parag Agrawal, who took over from co-founder and ex-boss Jack Dorsey last November.
But in his offer document, Elon Musk told Twitter’s board members that he doesn’t have confidence in management.
Mr. Agrawal told their employees on Monday that the future of Twitter is quite uncertain.
According to the Reuters news agency, once the deal completes, we don’t know which direction the platform will go, said Mr. Parag Aggrawal (CEO, Twitter).
Mr. Musk’s targeting of Twitter has moved at incredible speed. At the beginning of April, he became the firm’s biggest shareholder, with a 9.2% stake in the company.
He was then asked to join Twitter’s board but refused the offer before launching a surprise bid for the company on 14 April, saying he wanted to “unlock” its potential for freedom of speech.
Twitter tried to protect his bid, threatening to dilute the shareholdings of anyone who bought more than a 15% stake in the firm. However, its stance shifted after Mr. Musk disclosed more financial details about his offered bid.
He has reserved $25.5bn of financing for the deal and will take a $21bn stake in the company.
The board approved the bid, which will now be presented to shareholders for a vote.
Will people leave Twitter?
Elon Musk hoped that even his strongest criticizers would remain on the platform “because that is what free speech means.”
However, some users have threatened to leave Twitter, while others have already left.
British actress Jameela Jamil, best known for A Good Place, said she expects the platform to become a lawless, hateful, xenophobic, intolerant, misogynistic space.
Why is Elon Musk keen to buy Twitter?
Elon Musk loves Twitter and has enormous followers of 83.8m followers. He tweets prolifically, sometimes controversially, and occasionally. The SEC barred him from tweeting about Tesla matters after one tweet wiped $14bn off its share price, and he was sued for defamation following a tweet about a diver in which he called him pedo guy.
But he has never roamed far from his keyboard.
On the other hand, Twitter is far less effusive about Elon Musk.
You might think, if someone offered you $44bn for a 16-year-old business that hadn’t enjoyed the exponential growth of its rivals, they were doing you a favor – and Twitter’s shareholders seem inclined to agree.
He wants to see Twitter fulfill its “extraordinary potential,” and he’s not even interested in making money. He has much of that already, and multi-billionaires can afford to have various priorities.
Twitter responded by going straight on the defensive side, deploying a “poison pill” strategy that prevented anybody from owning more than 15% of its shares. At the same time, Musk pointed out that a deal had now been agreed.
Perhaps the board was shocked by Musk’s statement that he wanted to see more “free speech” and less moderation. Many Republicans, who have long felt that Twitter’s moderation policies favor the freedom of speech of left-leaning views, were delighted.
But regulators worldwide are lining up to crack down on social networks and force them to take more responsibility for the content they carry, issuing steep fines for non-compliance on material that incites violence, is abusive, or classifies as hate speech, among other things.
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