Throughout Monday, rumors that the board of directors at Twitter and Elon Musk had reached a deal regarding his proposal to buy the company for $44 billion. Late Monday afternoon, an announcement that the board had unanimously accepted his bid was made public, pending the approval of Twitter stockholders.
As a result, Twitter shares are up five percent, reaching $51.91 per share.
The interest surrounding Musk’s deal to purchase the social media platform represents a thirty-eight percent increase in the stock’s price since Musk originally purchased 9.2 percent of the company on April 1, 2022.
In order for Musk to assume control of Twitter, not only will the stockholders need to agree, but applicable regulatory approvals must follow and other “customary closing conditions” must be met. Those conditions remain unnamed. Musk has managed to obtain about $46.5 billion to make the purchase. This amount includes $21 billion in equity financing and $25.5 billion of “fully committed debt and margin loan financing.” The deal is expected to close some time during 2022, although an exact date has not been announced.
The move will “take the social media giant private.”
Musk has described himself as a “free-speech absolutist,” but he has lately become a hero of conservatives who believe that Twitter unfairly censors opinions that might be critical of progressive or even liberal policies. Shortly before Musk bought just over nine percent in the company, he had tweeted on his personal account multiple opinions regarding Twitter’s alleged abuse of free speech. Musk referred to Twitter as the “public square” where individuals should be able to share their thoughts regardless of political leanings. He even tweeted a question regarding his purchase of the platform.
Musk has nearly 80 million followers; many of them encouraged him to buy the social media company. Some encouraged him to lift the ban on former President Trump’s Twitter account. Trump has said he will not return to Twitter, even if Musk does reinstate his account, according to Fox News and Reuters.
Musk has also tweeted about improvements to the platform that have little to do with free speech, but are all about user friendliness. He tweeted a question, asking if he should have developers add an edit button for posts (which was met with a resounding “yes”).
Musk has been vocal about his criticism of current Twitter CEO Parag Agrawal and what many perceive as infringements of free speech on the platform. Musk said in a statement: “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.”
Musk also said that he has plans to “defeat spam bots,” and he has said prior to the acquisition that he wanted to make the algorithms of the platform “an open source” so that people will grow to trust the platform and begin to use it again. He has even said that he wants to authenticate human accounts for the security of users.
When Musk acquired the nine percent stake in the company, the CEO and other board members invited Musk to join them on Twitter’s director board. Although it appeared that Musk would accept the offer, within days, Musk declined the offer. As a part of being on Twitter’s board, Musk could own no more than 14 percent of the company, which is not enough to have a controlling stake. Within days, rumors flew that Musk was gearing up to purchase the company. Twitter’s board responded by adopting a “poison pill” approach that was meant to prevent Musk from purchasing the company. Late last week, Musk announced he had secured the funding to buy Twitter.
The independent chairman of the Twitter board, Brett Taylor, said regarding the decision to accept Musk’s offer, “(the board) conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing.”
