Twitter’s board of directors has agreed to Elon Musk’s $44 billion (£34.5 billion) takeover bid.
Mr Musk, who made the surprise bid less than two weeks ago, stated that Twitter has “tremendous potential” that he intends to unlock.
He also advocated for a number of changes, ranging from loosening content restrictions to eliminating fake accounts.
The company initially rejected Mr. Musk’s offer, but it will now put the deal to a vote among shareholders.
According to Forbes magazine, Mr Musk is the world’s richest person, with an estimated net worth of $273.6 billion, owing primarily to his ownership of the electric vehicle manufacturer Tesla, which he runs. He is also the CEO of the aerospace company SpaceX.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where critical issues affecting humanity’s future are debated,” Mr Musk said in a statement announcing the deal.
“I also want to make Twitter better than ever by adding new features, opening up the algorithms to increase trust, defeating spam bots, and authenticating all humans,” he added.
“Twitter has enormous potential, and I’m excited to work with the company and the user community to realise it.”
The move comes as Twitter is under increasing scrutiny from politicians and regulators regarding the content that appears on its platform. It has faced criticism from both the left and the right for its efforts to moderate misinformation on the platform.
Last year, in one of its most visible moves, it barred former US President Donald Trump, perhaps its most powerful user, citing the risk of “incitement of violence.”
“A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech,” Mr. Musk said at the time.
The takeover has been welcomed by the right in the United States, though Mr. Trump told Fox News on Monday that he has no plans to rejoin the platform.
🚀💫♥️ Yesss!!! ♥️💫🚀 pic.twitter.com/0T9HzUHuh6
— Elon Musk (@elonmusk) April 25, 2022
The move comes as Twitter is under increasing scrutiny from politicians and regulators regarding the content that appears on its platform. It has faced criticism from both the left and the right for its efforts to moderate misinformation on the platform.
Last year, in one of its most visible moves, it barred former US President Donald Trump, perhaps its most powerful user, citing the risk of “incitement of violence.”
“A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech,” Mr. Musk said at the time.
The takeover has been welcomed by the right in the United States, though Mr Trump told Fox News on Monday that he has no plans to rejoin the platform.
He points out that Twitter announced last week that it would prohibit advertisements that deny the scientific consensus on the climate crisis, acknowledging that false information can undermine efforts to protect the planet.
Controversial history
Mr. Musk, who has over 80 million Twitter followers, has a contentious history on the platform.
In 2018, US financial regulators accused him of misleading Tesla investors with his tweets, which were settled for $40 million and which Mr. Musk continues to deny.
In 2019, he was sued for defamation, which he won, after calling a diver involved in rescuing schoolboys in Thailand a “pedo guy” on the platform.
Mr. Musk, who has a history of clashing with journalists and blocking critics, suggested on Monday that he saw Twitter as a forum for debate.
“I hope that even my harshest critics continue to follow me on Twitter because that is what free speech entails,” he wrote just hours before the agreement was announced.
Can Musk turn Twitter around?
Twitter’s shares will be delisted and taken private as part of the takeover, which is expected to be completed later this year.
Mr. Musk has stated that this will allow him to make the changes he desires to the business.
He has proposed, among other things, allowing longer posts and introducing the ability to edit them after they have been published.
Following the announcement of the deal, Twitter shares closed more than 5% higher on Monday.
However, the price remained lower than Mr. Musk’s $54.20 per share offer, indicating that Wall Street believes Mr. Musk is overpaying for the company.
Mr. Musk has stated that he is unconcerned about the purchase’s economics. He will, however, take on a company with a track record of poor financial performance.
Despite its power, Twitter has never made a profit, and user growth has slowed, particularly in the United States.
The company, which was founded in 2004, ended 2021 with $5 billion in revenue and 217 million daily users worldwide, which is a fraction of the figures claimed by other platforms such as Facebook.
Twitter’s board chair, Bret Taylor, said the company had fully evaluated Mr. Musk’s offer and determined it was “the best path forward for Twitter’s stockholders.”
Parag Agrawal succeeded Twitter co-founder Jack Dorsey in November
It is unclear who will lead the company in the future. Twitter is now led by Parag Agrawal, who succeeded co-founder and former CEO Jack Dorsey in November.
However, in his offer document, Mr Musk stated, “I don’t have confidence in management.”
Mr. Agrawal informed employees on Monday that Twitter’s future is uncertain.
“Once the deal is completed, we don’t know which direction the platform will take,” he told Reuters.
Shareholder vote
Mr Musk’s targeting of Twitter has moved at a breakneck pace. He became the firm’s largest shareholder with a 9.2% stake, it was revealed in early April.
He was then invited to join Twitter’s board of directors, but declined before making a surprise bid for the company on 14 April, claiming he wanted to “unlock” its potential as a bastion of free speech.
Twitter attempted to deflect his bid by threatening to dilute the shareholdings of anyone who purchased more than a 15% stake in the company. However, its position shifted after Mr Musk revealed additional financial details about his proposed bid.
He has secured $25.5 billion in financing for the transaction and will own a $21 billion stake in the company.
The board unanimously approved the bid, which will now be put to a vote by shareholders.
Source: BBC
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