Elon Musk buys Twitter for $44 billion and will take the company private

TOM KRISHER and MATT O’BRIEN

Elon Musk on Monday reached a deal to buy Twitter for around $44 billion, promising a more lenient touch to control content on the platform where he promotes his interests, attacks critics and opines on social and economic issues. to over 83 million followers.

The outspoken CEO of Tesla, who is also the richest person in the world, said he wanted to own and privatize Twitter because he thinks it doesn’t live up to its potential as a platform. form for freedom of expression.

Musk said in a joint statement with Twitter that he wanted to make the service “better than ever” with new features, such as removing automated “spam bots” and opening up its algorithms to the public to increase trust.

“Free speech is the foundation of a functioning democracy, and Twitter is the digital public square where issues vital to the future of humanity are debated,” Musk said, adding hearts, stars and rocket emojis in a tweet that highlighted the statement.

A more passive approach to content moderation has many people concerned that the platform is becoming more of a haven for misinformation and hate speech, something it has worked hard for the past few years to mitigate.

The deal was completed about two weeks after the billionaire first revealed a 9% stake in the platform. Musk said last week he had secured $46.5 billion in funding to buy Twitter, pressuring the company’s board to broker a deal.

Twitter said the transaction had been unanimously approved by its board of directors and is expected to close in 2022.

Shares of Twitter Inc. rose 6% on Monday to $52 per share. On April 14, Musk announced an offer to buy the social media platform for $54.20 per share. While the stock has been up sharply since Musk made his offer, it is well below the high of $77 per share it hit in February 2021.

Musk has described himself as a “free speech absolutist,” but he’s also been known to block or denigrate other Twitter users who question or disagree with him.

In recent weeks, he’s voiced a number of proposed changes for the company, ranging from easing its content restrictions — such as the rules that suspended former President Donald Trump’s account — to removal from the platform of fake and automated accounts, and the abandonment of its advertising. turnover-based revenue model. Musk thinks he can boost his revenue through subscriptions that give paying customers a better experience, maybe even an ad-free version of Twitter.

When asked at a recent TED talk if there were any limits to his notion of “free speech,” Musk said that Twitter or any forum is “obviously bound by the laws of the country in which he operates. Obviously, there are limits to freedom of expression. in the United States, and, of course, Twitter should follow these rules.

Beyond that, however, he said he would be “very reluctant” to remove things and would generally be cautious about permanent bans.

It won’t be perfect, Musk added, “but I think we want him to really have the perception and the reality that speech is as free as reasonably possible.”

After the deal was announced, the NAACP released a statement urging Musk not to allow former President Trump, the 45th president, back on the platform.

“Disinformation, misinformation and hate speech have NO PLACE on Twitter,” the civil rights organization said in a statement. “Don’t let 45 go back to the platform. Don’t let Twitter become a petri dish for hate speech or lies that subvert our democracy. »

Efforts to “deregulate” Twitter could thwart the company’s current commitment to making the platform as safe as possible for all users, said Brooke Erin Duffy, a communications professor at Cornell University and an expert on social media. social media. ”

“Marginalized user communities are particularly vulnerable to the forms of hate and harassment that so often circulate in unregulated online spaces,” she said.

Some users said on Monday that they plan to leave the platform if Musk takes it over. To which he replied on Twitter: “I hope even my worst critics stay on Twitter because that’s what free speech means.”

Musk has fought with the Securities and Exchange Commission on several occasions because he used Twitter to taunt regulators.

The SEC investigated Musk’s August 2018 tweets in which he claimed he secured financing to take Tesla private for $420 a share, although he did not. Musk is fighting an SEC subpoena in the case in federal court. More recently, Musk appears to have violated SEC rules by failing to disclose when he reached a 5% stake in Twitter, expecting to have more than 9%.

Remarkable as they are, the SEC cases have no bearing on Musk’s ability to buy a company, according to Anthony Sabino, a business professor at St. John’s University, making it unlikely that they would. represent obstacles to taking control.

With initial concerns over the deal, Twitter had adopted an anti-takeover measure known as the poison pill that could make a takeover bid prohibitively expensive. But the board decided to negotiate after Musk updated his proposal last week to show he had secured funding, according to the Wall Street Journal.

While Twitter’s user base of over 200 million remains far below rivals such as Facebook and TikTok, the service is popular with celebrities, world leaders, journalists and intellectuals. Musk himself is a prolific tweeter with a following that rivals several pop stars in the ranks of the most popular accounts.

Last week, he said in documents filed with US securities regulators that the money would come from Morgan Stanley and other banks, some of which was secured by his huge stake in Tesla.

Musk is the richest person in the world, according to Forbes, with a fortune of nearly $279 billion. But much of his money is tied up in shares of Tesla — he owns about 17% of the electric car company, according to FactSet, which is valued at more than $1 trillion — and SpaceX, his private space company. It’s unclear how much money Musk has.

Musk made his fortune in 1999 when he sold Zip2, an online mapping and business directory, to Compaq for $307 million. He used his share to create what would become PayPal, an internet service that bypassed banks and allowed consumers to pay businesses directly. It was sold to eBay for $1.5 billion in 2002.

That same year, Musk founded Space Exploration Technologies, or SpaceX, after finding that cost constraints were limiting NASA’s interplanetary travel. The company eventually developed cost-effective reusable rockets.

In 2004, Musk was courted to invest in Tesla, then a startup trying to build an electric car. Eventually, he became CEO and led the company to astronomical success as the world’s most valuable automaker and biggest seller of electric vehicles.

Musk’s promise to make Twitter a safe haven for free speech could dampen the appeal of Donald Trump’s troubled Truth Social app, which the former president has touted as a Twitter competitor that would cater to conservatives . Truth Social is part of Trump’s new media company, which has agreed to go public with Digital World Acquisition Corp. Shares of DWAC have fallen 16.2% on Monday and 46% since Musk revealed his Twitter stake.

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Krisher reported from Detroit. O’Brien reported from Providence, RI AP Business Writer Kelvin Chan reported from London.

Karen J. Nelson