Twitter's board of directors unanimously agreed to Musk's offer to purchase the social media platform at a price of $44 billion, the company announced Monday
The deal brings arguably the internet's most influential platform under the control of one of the world's richest people. Musk, a prolific Twitter user, has repeatedly decried efforts to moderate speech on the service.
“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 said in a statement posted to Twitter. “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 spam bots, and authenticating all humans. Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock once the transaction closes. It's a 38 percent premium to Twitter’s closing stock price on April 1 — the last trading day before Musk disclosed his approximately 9 percent stake in Twitter.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Twitter board chair Bret Taylor in a statement. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
It was first revealed in early April that Musk had acquired a 9 percent stake in Twitter, making him one of the company's biggest shareholders. Since then, Musk and the company had engaged in something of a corporate battle over the future of the company, with Musk briefly agreeing to join the board, later announcing an acquisition offer, and Twitter looking to stop Musk's acquisition with a corporate maneuver known as a "poison pill," which is meant to block takeover efforts.
The poison pill was seen as a stop-gap measure to prevent Musk from purchasing the social media platform. The "pill," known as a shareholder rights plan, would have prevented Musk from purchasing more than 15 percent of Twitter shares on the open market by triggering a provision to allow Twitter to sell more shares, diluting the value of Musk's holdings.
But on April 20, Musk filed a securities document showing he had obtained financing agreements worth $46.5 billion from a group of banks led by Morgan Stanley to complete a potential transaction. That may have put pressure on Twitter’s board to more seriously consider Musk's bid.
Twitter shares had lost some 17 percent of their value between the time current CEO Parag Agrawal was announced as the social media platform's newest chief and April 14, when Musk revealed his outsized ownership stake.
Jack Dorsey, who co-founded Twitter and was its CEO until stepping down in November, celebrated the move, saying that the company "has been owned by Wall Street and the ad model" and that "taking it back is correct first step."
"In principle, I don’t believe anyone should own or run Twitter," Dorsey said. "It wants to be a public good at a protocol level, not a company." He called Musk the "singular solution" to that problem and said: "Elon’s goal of creating a platform that is 'maximally trusted and broadly inclusive' is the right one."
Lauri Brunner, senior portfolio manager for financial services group Thrivent’s large cap growth fund, which holds about $160 million-worth of Twitter shares, told NBC that given his record at Tesla, Musk would be able to serve as a "catalyst" for delivering strong performance at Twitter. Thrivent is also a Tesla shareholder.
"I think that Elon is very transparent about his plans and his strategy," Brunner said.
In a statement following news of the acquisition, Derrick Johnson, president of the National Association for the Advancement of Colored People, struck a cautious tone.
"Do not allow Twitter to become a petri dish for hate speech, or falsehoods that subvert our democracy," Johnson said in part. "Protecting our democracy is of utmost importance, especially as the midterm elections approach. Mr. Musk: lives are at risk, and so is American democracy.”
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