Twitter’s board unanimously decided to sell the platform in its entirety to Tesla and SpaceX CEO Elon Musk for a $44 billion transaction, the company revealed on Monday.
As part of the acquisition, stockholders would get $54.20 per share, a 38% premium over the social platform’s closing stock price on April 1. The transaction is scheduled to close by the end of the year.
“Free speech is the core of a functional democracy, and Twitter is the digital town square where critical issues affecting humanity’s future are debated,” Musk said in a statement.
“I also want to make Twitter better than ever by adding new features, opening up the algorithms to improve trust, combating spam bots, and authenticating all people.” Twitter has enormous potential, and I am excited to work with the company and the user community to realise it.”
Mr Musk posted a screenshot of his speech with rockets, shooting stars, and love as emojis. “Yesss!!!” he exclaimed.
On Monday, Twitter shares were trading up more than 5% at over $52.00.
“Twitter serves a function and has an influence on the entire planet.” “We are deeply proud of our staff and motivated by work that has never been more vital,” said Twitter CEO Parag Agrawal in a statement.
On Monday, the business had an all-hands video conference to discuss the agreement, during which Mr Agrawal stated there would be no job layoffs and that a hiring freeze would be implemented.
Mr Musk said that he will soon join the company’s workforce for a question-and-answer session.
“We don’t know which route the platform will go once the transaction closes,” Mr Agrawal was reported as saying by Bloomberg and Reuters, citing audio from the meeting and those who participated.
Mr Musk, the billionaire CEO and co-founder of Tesla, the world’s largest electric vehicle firm, announced last week that he had a $46.5 billion cash commitment to support his quest to purchase Twitter and was considering launching a tender offer for its shares.
Mr Musk stated in a regulatory filing on Thursday that he had personally committed to providing $33.5 billion for the transaction. This will comprise $21 billion in stock and $12.5 billion in margin loans.
The board of directors of Twitter is thought to have convened on Sunday to examine Mr Musk’s financing strategy for his proposal.
Mr Musk attempted to purchase 100% of Twitter in April, but the company’s board of directors sought to protect itself from the takeover proposal by implementing a limited-duration shareholder rights plan, which would allow its owners to buy extra stock under a “poison pill” method.
Mr Musk’s offer came in response to repeated concerns about content restriction and a lack of free expression on the platform.
“Because Twitter functions as the de facto public town square, failure to adhere to free speech rules gravely weakens democracy.” “What should be done?” Mr Musk stated on Twitter last month.
According to his research, 70.4 percent of respondents believe Twitter violates free speech norms, while 29.6 percent favour the network.
“I hope that even my fiercest detractors remain on Twitter, since that is what free expression means,” he said earlier on Monday, as people threatened to abandon the network.
In response to a reporter’s inquiry about the agreement, White House Press Secretary Jen Psaki stated, “President [Joe Biden] has long talked about his concerns about the power of social media platforms, including Twitter and others, to spread misinformation and disinformation, and the need for these platforms to be held accountable.”
Mr. Musk’s purchase has been faced with opposition, notably from Twitter’s shareholders.
Saudi billionaire Prince Alwaleed bin Talal, through his Kingdom Holding Company, rejected Mr Musk’s bid last week, saying it did not “come close to the underlying worth of Twitter given its development possibilities.”
This month, the buyout company Thoma Bravo contacted Twitter to indicate interest in putting together an alternative purchase offer to Mr Musk’s.
According to Reuters, which cited sources, the business with more than $103 billion in assets under management as of the end of December alerted Twitter that it was considering such a move.
However, according to Reuters, Twitter did not get any rival purchase bids from other organisations or firms.
“The pressure was on Twitter to make a decision on Musk’s proposal before Thursday’s earnings report,” Edward Moya, senior market analyst for the Americas at New York-based Oanda, said.
On Thursday, Twitter is set to release its first-quarter profits for the year.
“We may see Twitter miss figures later this week… “Given their well-documented challenges to monetize the site, that wouldn’t be a major surprise,” Neil Campling, co-head of Mirabaud Securities’ Global Thematic Group, told The National.
The company’s net loss for the fiscal year 2021 was $221.4 million, down from $1.14 billion in the previous year.
This was due to increased income, which increased by 37% year on year to well than $5 billion last year.