Explained: Elon Musk’s Takeover Of Twitter

Explained: Elon Musk’s Takeover Of Twitter
Image source: MarketWatch

The ongoing buildup on whether the Tesla and SpaceX CEO will purchase Twitter has finally reached its conclusion, with Elon Musk acquiring the social media platform for $44 billion. While announcing the takeover, Musk said, “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.”

The world’s richest person will now be in control of one of the most popular social media platforms, used by millions of people worldwide. The platform gained notoriety in January 2021, after permanently banning the Twitter account of the former president of the United States, Donald Trump, due to the risk of further incitement of violence after the Capitol Complex riots. Many suggested that the permanent ban was an attack on freedom of speech. Musk has made it clear that his reason behind buying Twitter is to support unrestricted expression and reduce user bans or takedowns of individual tweets. “It’s very important for there to be an inclusive arena for free speech,” he said during an interview at the TED conference. “Twitter has become kind of the de-facto town square, so it’s just really important that people have both the reality and the perception that they are able to speak freely within the bounds of the law.” However, his tolerance around being able to handle criticism of his interests has been mixed. Musk added, “A good sign as to whether there is free speech is: Is someone you don’t like allowed to say something you don’t like? If that is the case, then we have free speech.”

The multi-billionaire plans to take the publicly-traded company private. This means that the buyer will be the company itself, or an outside investor will offer to purchase publicly held shares at a premium. For instance, if Company A’s shares are trading at $10, then the buyout price will have to be higher than $10, to make it lucrative enough for public shareholders to sell their holdings. Musk has wooed Twitter shareholders with the financing details of his offer, and with reports suggesting that shareholders will receive $54.20 in cash for each share of Twitter stock they own, as per the terms of the deal. CNN reported that the deal matched Tesla CEO’s original offer and marked a 38 percent premium over the stock price the day before Musk revealed his stake in the company. Although initially, the board manoeuvred to block Musk from taking the social media network private. The New York Stock Exchange also suspended the trading of Twitter stock amid reports that the company was close to accepting Musk’s takeover offer.

Twitter’s independent board chair Bret Taylor said in a statement, “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing.” Taylor hailed the deal as “the best path forward for Twitter’s stockholders”. Twitter co-founder and former CEO Jack Dorsey, after posting a series of ambiguous tweets leading up to the shift in ownership, has tweeted, “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,” he wrote. Dorsey continued, “Twitter is the closest thing we have to a global consciousness. Solving for the problem of [Twitter] being a company, however, Elon is the singular solution I trust. I trust his mission to extend the light of consciousness.”

 

Read more: How Will The Russia-Ukraine Conflict Impact Indian Economy?

 

Current CEO Parag Agrawal and Taylor held an online meeting with employees, on April 25, elaborating on the board’s decision to sell the company to Musk. Reports have suggested that employees have been in a state of uncertainty, with many employees vocally opposed to the Musk deal, and worried that his brash, combative style will hurt company culture and alienate some employees. A Bloomberg report said that just 10 percent of Twitter workers would be excited about Musk acquiring the company. Agrawal’s future still remains rather unsure, with reports suggesting that his stint as CEO could be short-lived. “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important,” said the IIT Bombay graduate in the company statement.

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