Twitter reaches deal to sell to Elon Musk for about $44 billion
Twitter has struck a deal with Elon Musk, handing the world's richest man control of a social network that has far-reaching influence on politics and society.
Musk will pay about $44 billion, or $54.20 a share, to take the social media company private, according to an announcement from Twitter.
The agreement comes less than two weeks after Musk first offered to buy Twitter, sending the company's board and management into crisis mode as they scrambled to figure out whether Musk was serious and whether his offer fairly valued the company.
Musk has vowed to "unlock" Twitter's potential by loosening what he sees as unfair restrictions on free speech.
"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," he said in Monday's announcement.
The maverick entrepreneur is a prolific user and outspoken critic of Twitter, where he has more than 83 million followers and regularly posts memes, boosts his companies Tesla and SpaceX, and squabbles with critics.
Musk began accumulating Twitter shares in January. On April 4, he revealed that he'd accumulated a 9% stake, making him the company's biggest individual shareholder. He began calling for changes to the platform, including loosening its rules over what users are allowed to post, banning bots that post spam, and making its algorithm public.
Twitter employees have lots of questions about the deal
If the deal goes through as expected, Musk will have the power to reshape the company and platform as he pleases. But many questions remain unanswered, including how much of his own time Musk, who's already CEO of both Tesla and SpaceX, will spend on Twitter as well as who will lead the social media company.
At a company-wide meeting on Monday afternoon, Twitter CEO Parag Agrawal told employees much about the future is up to Musk, according to a person who attended. Agrawal will remain CEO until the deal closes, but it's unclear what will happen after that point. Twitter is not currently planning layoffs, the CEO said. The company plans to bring in Musk to answer employees' many questions about what the deal means for them.
Asked whether Musk might reinstate the account of former President Donald Trump, who was banned after the Jan. 6th Capitol riot, Agrawal said that was a question for Musk. "Once the deal closes we don't know which direction the platform will go," the CEO said.
Musk tweeted on Monday, before the deal was unveiled, "I hope that even my worst critics remain on Twitter, because that is what free speech means."
But some observers say if Musk relaxes content rules, Twitter could be overrun by misinformation and toxic posts.
"A platform that moderated only illegal speech would quickly be overcome by spam and garbage," said Jameel Jaffer with the Knight First Amendment Institute at Columbia University. "That kind of platform wouldn't work for anyone, whatever their political views."
Other experts, including Paul Barrett at NYU's Stern School for Business and Human Rights, have similar concerns.
"Without vigorous content moderation, the platform Musk seeks to own would be swamped by spam, porn, anti-vaccination misinformation, QAnon conspiracies, and fraudulent campaigns to undermine the midterms and 2024 presidential election," Barrett said.
'Poison pill' afforded Twitter more time to consider offer
After accepting and then rejecting an invitation to join Twitter's board, Musk dropped a new bombshell on April 14th with his unsolicited $54.20-a-share offer to buy the whole company and take it private.
But lack of details about how Musk would finance the deal left many doubting he was serious. Twitter's board quickly adopted a so-called "poison pill," which served essentially as a speed bump, a way to slow down Musk from acquiring more shares in the public market, as company leadership weighed the offer.
"The board got some extra time with the poison pill but ultimately had to get to the negotiation table with Musk to get this deal done as the clock struck midnight on Twitter's history as a public company," said Dan Ives, an analyst at Wedbush Securities.
Last week, Musk announced he had lined up the money to take Twitter private. In a regulatory filing, he said Morgan Stanley, Bank of America, and several other banks promised to lend $25.5 billion, backed in part by some of Musk's Tesla shares, and that he would provide up to $21 billion in cash.
Those details may have shifted the board's view. While Twitter's stock hit highs above $70 a share last year, the company's shares had fallen below $40 in recent months, amid lingering questions over its ability to grow.
"The Twitter board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders," said Bret Taylor, Twitter's chairman, in a statement.
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Transcript
ROB SCHMITZ, HOST:
After much speculation, Elon Musk is buying Twitter for about $44 billion and taking the company private. There are lots of questions about what the world's richest person plans to do with the social network.
For some answers, let's turn to NPR tech correspondent Shannon Bond. Hey, Shannon.
SHANNON BOND, BYLINE: Hey, Rob.
SCHMITZ: Shannon, how did this deal come together in the end?
BOND: Well, I mean, ultimately, Twitter's board looked at Musk's offer and decided it was a good deal. And remember - it was only early April when Musk, who himself is a prolific Twitter user - he has more than 83 million followers - he revealed he'd been accumulating the stake in Twitter. And less than two weeks ago, he came in with an offer to buy the whole company, and that sent the board into crisis mode, right? Like, was Musk serious? Was this a fair price? Is there a better offer or a different option out there? But the board and Musk reportedly met over the weekend and into today to hammer out the details. And in the end, this all came together quite quickly.
SCHMITZ: It certainly did. You know, there's been a lot of back-and-forth over the past couple of weeks, and it seemed like Twitter did not want Musk to take it over. What changed?
BOND: Yeah. I mean, Elon Musk is polarizing, to say the least. This whole saga has been polarizing. And the board had actually even put in place what's called a poison pill to try to block Musk from buying more of the company. And that was partly to buy themselves time to consider this deal. It appears what changed is that last week, Musk laid out his financing plan, showing he was serious. You know, he's got several banks promising loans. He's going to put in his own cash. And at that point, I think the board had to take the offer much more seriously.
Now, Musk offered $54.20 a share, and that's a lot higher than what Twitter has been trading at for most of this year. So today, with the announcement, Twitter Chairman Brett Taylor said, you know, this is a big premium, and the board does believe this is the best path forward for shareholders.
SCHMITZ: So what does Musk plan to do with Twitter? Has he said anything about making any changes?
BOND: He's said lots of things. He's tweeted lots of ideas. His biggest priority seems to be around Twitter's rules about what people can post. Now, you know, in that, Twitter is pretty much in line with the other big social networks, but Musk thinks these kind of restrictions are excessive. And in today's announcement, you know, he described free speech as the bedrock of democracy and Twitter as, quote, "the digital town square where matters vital to the future of humanity are debated." So Musk says he thinks Twitter should allow all legal speech. You know, Rob, here in the U.S., that would mean leaving up things like paid speech, harassment, state-backed disinformation, spam. These are all things the platform currently limits or removes.
Now, what Musk has not said is what he would do to fix Twitter's fundamental business problem, which is, you know, this is pretty much a niche platform that struggles to make money. It may be influential and drive a lot of news and culture. It does not have a lot of users. You know, Facebook has about 10 - more than 10 times as many users as Twitter. And Twitter has tried but not been able to broaden its reach among users or advertisers. And, you know, this company is unprofitable. That's the core problem here.
SCHMITZ: That is fascinating. You know, how are people reacting to this deal?
BOND: Well, all of Musk's talk about free speech in this whole saga, you know, has fueled a lot of speculation that former President Donald Trump could return to Twitter. Now, remember, you know, he was - previously was one of Twitter's, you know, most influential, loudest users, and he was banned after the January 6 Capitol riot. But today, Trump said he is not going back to Twitter.
Meanwhile, inside Twitter, you know, we're hearing just lots of uncertainty. You know, there are employees who are fans of Musk, but many employees are really wary of these changes. Leadership has kept very quiet during this entire saga with Musk, and a lot of staff are frustrated. They want to know what this means for their future, for - you know, who's going to run Twitter, what's going to happen to their stock options. Twitter's CEO and chairman are holding an all-staff meeting, so I think they're going to be facing a lot of questions from employees about all of these issues.
SCHMITZ: Lots of uncertainty. NPR's Shannon Bond, thank you.
BOND: Thank you. Transcript provided by NPR, Copyright NPR.
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