The deal, one of the biggest-ever leveraged buyouts of a listed company, arrives less than two weeks after Musk put forward his initial bid of roughly $54.20 per share—a 38% premium over Twitter’s closing stock price on the last trading day before Musk disclosed his 9% stake in the company—in an April 14 filing with the U.S. Securities and Exchange Commission. Reports surfaced Monday morning that despite originally adopting a “poison pill” defense against Musk’s unsolicited offer, Twitter’s board began seriously considering the proposal after Musk lined up $46.5 billion for the deal—with more than $25 billion in financing from Morgan Stanley and other institutions, plus $21 billion of his own equity. In addition to controlling Tesla Inc., Musk was already Twitter’s largest individual shareholder.
Now, the world’s richest man is set to take Twitter private. Twitter’s stock opened 4% higher on Monday, at about $51 a share, as the two sides closed in on a deal. Musk said in a live TED interview on April 14 that he would try to keep as many shareholders as is legally possible for a private company, which is typically 500. The company currently has over 1,700 individual and institutional shareholders.
Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction, as was outlined in his initial bid. The company will become privately held as soon as the transaction is complete.
How Twitter will ultimately transform under Musk’s leadership remains unclear. But the billionaire Tesla CEO has made some of his overarching intentions for the company apparent. Musk has called himself a “free speech absolutist” and insinuated that he will do away with some portion of Twitter’s content moderation policies, which protect against hate speech, incitements of violence, and targeted harassment, among other things. Musk has also pledged to introduce an edit button to Twitter and expressed a desire to make the site’s algorithm more transparent.
Hours before his acquisition was announced, Musk tweeted:
“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 of the deal. “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 employees are skeptical of Musk’s intentions. “In a way, [Musk’s] goals are aligned with ours in that we are certainly interested in protecting democracy. But the idea of bringing more free speech to the platform exposes his naiveté with respect to the nuts and bolts of content moderation,” a Twitter employee on the health team, which focuses on keeping Twitter a safe, user-friendly space, told TIME in mid-April. “If you look historically, there have been a lot of platforms founded on this free speech principle, but the reality is that either it becomes a cesspool that people don’t want to use, or they realize that there is actually the need for some level of moderation.”
Within hours of Musk’s deal being announced on Monday afternoon, Bloomberg reported that Twitter had locked down product changes at the company in a likely attempt to make it harder for employees to make unauthorized changes in response to the controversial sale.
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