In a significant development Elon Musk has agreed to acquire Twitter Inc for $44 billion in an all cash deal.
Musk, who terms himself as a free speech absolutist, was earlier critical of Twitter’s moderation. He aims to place Twitter’s algorithm for prioritizing tweets to go open source.
Following the acquisition, consumers of the platform expect more logical moderations and harassment from right-wing aligned individuals. While conservatives cheered the prospect of a new management team, leftists fear a meltdown.
Musk has also advocated user-friendly tweaks to the service, such as an edit button and defeating “spam bots” that send overwhelming amounts of unwanted tweets.
Discussions on the deal, which until last week appeared to be uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
“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,” said Musk in a tweet.
Twitter co-founder and former CEO Jack Dorsey weighed in on the deal late on Monday with a series of tweets thanking both Musk and current Twitter CEO Parag Agrawal for “getting the company out of an impossible situation.”
“Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step,” said Dorsey.
With the news reaching the market, Twitter’s shares rose by 5.7% to $51.70. The deal represents a 40% premium over the closing price the day before Musk disclosed he had bought a more than 9% stake.
“I think if the company were given enough time to transform, we would have made substantially more than what Musk is currently offering,” said Jonathan Boyar, managing director at Boyar Value Group. He went on to add, “If the public markets do not properly value a company, an acquirer eventually will.”
Musk, who is worth $268 billion, according to Forbes, has said he is not primarily concerned with the economics of Twitter.
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don’t care about the economics at all,” said Musk in a recent public talk.
The deal was approved by Twitter’s board and is now subject to a shareholder vote. Regulatory hurdles are expected, opined analysts.
The White House declined comment on the deal. US President Joe Biden has long been concerned about the power of social media platforms. “Our concerns are not new,” said White House spokesperson Jen Psaki, while adding tech platforms need to be held accountable. “The president has long talked about his concerns about the power of social media platforms, including Twitter and others, to spread misinformation.”