Elon Musk Reaches a Deal to Buy Twitter
On Monday, a deal seemed to be finalized between Tesla CEO Elon Musk and the Twitter board that would see Musk purchase the social media platform for approximately $44 billion. This deal comes after two weeks of negotiations that saw the deal go from nothing to finalize.
In the week before Musk sent an initial offer letter to Twitter’s CEO to buy the company, he had bought a 9.2% stake in the company. That made him the platform’s largest shareholder. That did not last very long, however, as just a few days later the Vanguard Group bought a 10.5% stake, overtaking Musk. Despite his investment in the company, Musk decided to deny the opportunity to sit on Twitter’s board.
In his letter to Twitter’s CEO, Musk made his first offer to buy the company. This offer equaled $43 billion, an amount that Musk said at the time was his best offer, with no plans to give anything more than that. However, this put the gears in motion, and negotiations were underway. For the next week, Twitter actively attempted to include roadblocks that would prevent Musk from acquiring the company in its entirety, but that did not halt discussions either.
That then led to Thursday the 21st, when Musk announced that he had $46.5 billion at the ready in financing to help him land the deal. At this point, the conversation about him buying Twitter largely turned from if to when. That being said, no deal was announced at any point throughout the rest of the week.
That then brings us to Monday, the 25th, when the deal for Musk to buy the platform for $44 billion was seemingly reached as it was agreed upon by the Twitter board. However, that does not mean that the deal is over and done with. This just brings the process to the next step. Several other parties have to weigh in on the matter. First, the platform’s shareholders must weigh in on the deal. That being said, the Twitter board is recommending that shareholders unanimously agree to the deal. Regulators in the US and other countries where Twitter does business also get to have their say. The deal cannot be considered complete until all of these things happen, but if all goes well, the deal is expected to be closed by the end of the year.
So what are Musk’s plans for Twitter as he takes the company private? He has announced several different ideas for new features and policies. He has said that he wants to open up the platform’s algorithm, which would allow the public to analyze it and suggest changes moving forward. He also wants to cut down on the amount of advertising that occurs on the platform, even floating around the idea of cutting out advertisements completely through a subscription service that would be paid monthly. Musk has also discussed the plan to soften policies on restricting speech on the platform, including lessening things like permanent account suspensions. The Tesla CEO says that more temporary restrictions would be more favorable.
Musk has also discussed some ideas for new features, including the ever-talked about edit button for tweets, which he hopes to add. He has also spoken of his hopes to eliminate spamming and Twitter bots, as well as authenticating all users as humans. However, he says that he is not fully aware of how he will tackle that issue just yet.
Finally, there is the discussion of what will happen to shareholders, employees, and others involved in the company. Musk has stated that he would like to retain as many shareholders as possible. It has also been said that stockholders will be paid for their investments by the normal schedule. With the $44 billion deal, stockholders will be receiving $54.20 per stock. It has also been stated that there are no layoffs expected for any of the company’s employees as the deal is closed.
It is again important to recognize that this deal is not closed and completed just yet. There will be more to come as the process moves through the additional required steps.