Musk gets Twitter for $44 billion to cheer and scare ‘free speech’ plan

NEW YORK, April 25 (Reuters) – Elon Musk on Monday inked a deal to buy Twitter Inc (TWTR.N) for $44 billion in cash, a transaction that will take control of the social media platform , which is populated by millions of users and global leaders, the richest person in the world has shifted to Twitter.

It’s a landmark moment for the 16-year-old company that has grown into one of the most influential public spaces in the world and now faces a number of challenges.

Musk has criticized Twitter’s moderation, calling himself a free speech absolutist, saying Twitter’s algorithm for prioritizing tweets should be public, and criticizing companies that advertise giving too much power over the service.

Political activists expect a Musk regime will mean less moderation and reinstatement of banned individuals, including former President Donald Trump. read more Conservatives hailed the prospect of fewer controls, while some human rights activists expressed fears of an increase in hate speech. Continue reading

Musk himself has described user-friendly improvements to the service, such as B. an edit button and defeating “spam bots” that send overwhelming amounts of unwanted tweets.

Discussions over the deal, which seemed uncertain last week, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his bid.

Under pressure, Twitter began negotiating with Musk to buy the company at its proposed price of $54.20 per share. Continue reading

“Freedom of expression is the bedrock of a functioning democracy, and Twitter is the digital marketplace where matters important to the future of humanity are debated,” Musk said in a statement.

Shares of Twitter rose 5.7% on Monday to close at $51.70. The deal represents a nearly 40% premium to the closing price the day before Musk announced he’d bought a more than 9% stake.

Even so, the bid is well below the $70 range that Twitter traded in last year.

“I think if the company had been given enough time to transform, we would have made a lot more than Musk is currently offering,” said Jonathan Boyar, chief executive officer of Boyar Value Group, which owns a stake in Twitter.

However, he added, “If the public markets don’t value a company appropriately, an acquirer eventually will.”

Musk’s move continues a tradition of billionaire buying control of influential media platforms, including Jeff Bezos’ 2013 acquisition of the Washington Post.

Twitter said Musk has secured $25.5 billion in debt and margin loan financing and provided $21 billion in equity.

Musk, who is worth $268 billion according to Forbes, has said he’s not primarily concerned with Twitter’s economics.

“Having a public platform that is maximally trustworthy and comprehensive is extremely important for the future of civilization. I don’t care about profitability at all,” he said in a recent public lecture.

Musk is CEO of both electric carmaker Tesla Inc (TSLA.O) and aerospace company SpaceX, and it’s not clear how much time he’ll devote to Twitter or what he’ll be doing.

“Once the deal closes, we don’t know what direction the platform will go,” Twitter CEO Parag Agrawal told employees on Monday. Continue reading

Edward Moya, an analyst at currency brokerage OANDA, said the deal points to different benefits.

“This is great news for Twitter shareholders as it doesn’t look like the company is going to get things right anytime soon,” Moya said in an email to clients. On the flip side, he said, “Tesla shareholders can’t be happy that Musk has to divert even more attention from winning the EV (electric vehicle) race.”

Nevertheless, Musk’s 84 million strong Twitter account is considered an important, free PR and marketing tool for Tesla.

The Twitter transaction has been approved by the company’s board of directors and is now subject to a shareholder vote. According to analysts, no regulatory hurdles are expected.

Wedbush analyst Daniel Ives said the company’s board had its back “against the wall” as Musk detailed his funding package and no other bidders showed up.

Despite being only about a tenth the size of far larger social media platforms like Meta Platforms Inc.’s (FB.O) Facebook, Twitter has been credited with spawning the Arab Spring insurgency and accused of playing a role in June 6. to play in January. 2021, storming of the US Capitol.

After Twitter suspended Trump over concerns about his supporters inciting violence following the attack on the US Capitol, Musk tweeted, “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”

Trump, whose company is building a rival to Twitter called Truth Social, said in an interview with Fox News on Monday that he would not be returning to Twitter.

The White House declined to comment on Musk’s deal Monday, but said President Joe Biden has long been concerned about the power of social media platforms.

“Our concerns are not new,” White House spokeswoman Jen Psaki said, adding that platforms must be held accountable. “The President has spoken at length about his concerns about the power of social media platforms, including Twitter and others, to spread misinformation.”

Reporting by Greg Roumeliotis in New York; additional reporting by Krystal Hu, Lewis Krauskopf and Megan Davies in New York, Noel Randewich in San Francisco, Sheila Dang in Dallas, and Andrea Shalal and Trevor Hunnicutt in Washington Writing by Peter Henderson Editing by Mark Potter, Anna Driver, Kenneth Li, Matthew Lewis and Leslie Adler

Our standards: The Thomson Reuters Trust Principles.