Elon Musk struck a deal Monday to buy Twitter for about $44 billion, in a victory for the world’s richest man to take over the influential social network frequented by world leaders, celebrities and cultural trendsetters.
Twitter agreed to sell itself to Mr. Musk for $54.20 a share, a 38 percent premium over the company’s stock price this month before revealing he was the company’s largest shareholder. Taking a company private — something Mr Musk has said he will do with Twitter — would be the biggest deal in at least two decades, according to data collected by Dealogic.
“Freedom of speech is the foundation of a functioning democracy, and Twitter is the digital town square where issues vital to the future of humanity are debated,” Musk said in a statement announcing the deal. “Twitter has tremendous potential – I look forward to working with the company and the user community to unlock it.”
The blockbuster deal covers an unlikely attempt by the famous mercurial Mr. Musk, 50, to buy Twitter — immediately raising questions about what he will do with the platform and how his actions will affect online speech worldwide.
The billionaire, who has more than 83 million followers on Twitter and has rummaged around the service throwing libel and memes, has repeatedly said he wants to “transform” the platform by promoting greater freedom of expression and giving users more control over what they see on it. Taking the company private allowed Mr. Musk to work on the service out of the prying eyes of investors, regulators and others.
Still, the scrutiny will likely be intense. Twitter isn’t the largest social platform — it has more than 217 million daily users, compared to billions for Facebook and Instagram — but it has played an outrageous role in shaping stories around the world. Political leaders have turned it into a megaphone, while corporations, celebrities and others have used it to hone image and build brands.
In recent years, Twitter has also become a target of criticism as some users spread misinformation and other toxic content on the service. Former President Donald J. Trump often turned to Twitter to insult and incite, until it banned him from the Capitol after the Jan. 6 riots last year. The company has repeatedly established policies to deal with unexpected situations.
Mr. Musk himself has had a rocky relationship with online speech. This year, for personal and security reasons, he attempted to destroy a Twitter account tracking his private jet. And his tweets have gotten him into trouble with regulators.
On Monday, he tweeted that he hoped his worst critics would stay on Twitter, because “that’s what free speech means”. He added in his statement that he hoped to increase trust by making Twitter’s technology more transparent, defeating the bots that spam people on the platform and “authenticating all people”.
Bridget Todd, a director of UltraViolet, a women’s rights group, said Mr. Musk’s deal could be treacherous for online speech because he may not support Twitter’s community standards and exclude users who violate those standards.
“This is a very slippery slope,” she said.
In Washington, Republicans, who have long accused Twitter of censoring their positions, applauded Musk’s deal.
“I’m hopeful Elon Musk will help curb the history of Big Tech by censoring users with a different point of view,” Tennessee Senator Marsha Blackburn said in a statement. tweet†
Mr Trump told Fox News on Monday that he would continue to post on his own social network, Truth Social. “I’m not going to Twitter,” he said, but added that he hopes “Elon buys Twitter, because he will make improvements to it.”
Democrats were hesitant about the deal. Jen Psaki, the White House press secretary, declined to comment specifically on the Twitter sale, but said President Biden “has long been concerned about the power of major social media platforms” and that they “should be held accountable for the damage they cause.” She said Mr Biden supported changes to online speech and antitrust laws.
In addition to speech problems, Twitter is facing questions about its business. The company has struggled for years to get new users and keep others coming back. The advertising activity, the main way Twitter generates revenue, is inconsistent. Twitter has not made a profit in eight of the past ten years.
Last year, the company lost $493 million on revenue of $5.57 billion. By contrast, Meta, the company formerly known as Facebook, had $39 billion in profits and $118 billion in revenue last year.
Twitter, which went public in 2013, has also had a tumultuous corporate history. It has faced repeated board failures and drama with its founders, and has been courted in the past by other interested buyers, including Disney and Salesforce. In 2020, activist investment firm Elliott Management took a stake in Twitter and called on Jack Dorsey, one of its founders, to step down as chief executive. Mr Dorsey stepped down last year.
“This company is very undervalued, especially when compared to other platforms and competitors like Facebook,” said Pinar Yildirim, a professor of marketing at the University of Pennsylvania Wharton School of Business. “If you look at it from a point of pure business value, there is definitely room for improvement.”
In a statement, Twitter’s chairman Bret Taylor said the board of directors had “conducted a thoughtful and comprehensive process” over Mr. Musk’s offer and that the deal would deliver “a substantial cash premium” to shareholders.
Regulators are unlikely to seriously challenge the transaction, former antitrust officials said, as the government usually steps in to stop a deal when a company buys a competitor.
The deal came about within a few weeks. Mr. Musk, who also heads electric car maker Tesla and rocket maker SpaceX, began buying Twitter stock in January, announcing this month that he had amassed a stake of more than 9 percent.
That immediately sparked a gamble about what Mr. Musk intended to do with the platform. Twitter executives initially welcomed him to its board of directors, but he changed course within days and instead started an offer to buy the company entirely.
An agreement initially seemed unlikely because the entrepreneur did not say how he would finance the deal. Twitter executives also seemed skeptical, as it was hard to discern how much Mr. Musk might be joking. For example, in 2018, he tweeted that he intended to take Tesla private and falsely claimed that he had “secured funding” for such a deal.
Twitter responded to Mr. Musk’s offer by posting a “poison pill,” a defensive maneuver that prevented the billionaire from acquiring more than 15 percent of the company’s stock.
Skepticism began to dissipate last week when Mr. Musk revealed in a securities filing that he had received commitments worth $46.5 billion to fund his offer on Twitter.
Morgan Stanley and a group of other lenders offered $13 billion in debt financing and another $12.5 billion in loans against Mr. Musk’s stock in Tesla. He was expected to add about $21 billion in equity financing. Twitter did not provide details on the equity financing on Monday. It also placed no conditions on Mr Musk’s financing that would prevent him from closing the deal.
The funding commitments forced Twitter to seriously consider Mr. Musk’s offer, people with knowledge of the situation said, especially as he threatened to make the offer directly to shareholders in a hostile bid.
Over the weekend, in a series of phone calls and video meetings, the board of Twitter and the billionaire dealmakers battled the terms of the purchase. The teams worked late Sunday into Monday on the final details.
Twitter’s financial advisors were Goldman Sachs, JPMorgan Chase and Allen & Company, while Morgan Stanley was Mr. Musk’s chief financial advisor.
How hands-on Mr Musk plans to be on Twitter is unclear. Among the unanswered questions are who he might choose to run the business and how involved he would be in running the service. In addition to leading Tesla and SpaceX, Mr. Musk has other companies, such as Neuralink, which aims to build a computer interface for the human brain, and the Boring Company, which makes tunnels.
Current Twitter CEO Parag Agrawal took over in November. Mr Agrawal has been working to “decentralize” the social network so that Twitter would make fewer decisions about content moderation and users would have more control over their social feeds. He is expected to remain in charge until at least the closing of the deal.
How many Twitter employees want to pursue Mr. Musk’s vision is also uncertain. Some employees are frustrated by the lack of communication about the takeover battle.
At a company meeting with employees on Monday afternoon, Mr. Agrawal and Mr. Taylor, the chairman, nodded at the emotional day and how employees most likely processed the news of a sale.
“It’s important to recognize that you all have a lot of different feelings about what’s happening,” Mr Agrawal said at the meeting, which The New York Times listened to. He said it could take three to six months for the deal to close, so “Right now we’re using Twitter as we always have.”
The deal, which has been approved by Twitter’s board of directors, is expected to close this year, subject to shareholder voting and certain regulatory approvals.
In the employees’ meeting, Mr. Agrawal acknowledged the uncertainty that lay ahead. “Once the deal is closed, we don’t know where this company will go,” he said.
Kate Conger† Cecilia Kango and David McCabe reporting contributed.
