Elon Musk is already CEO of Tesla and SpaceX, founder of The Boring Company, and the world’s richest person. Today he adds another title to his prodigious bio: Owner of Twitter.
On Monday afternoon Twitter announced that it has entered into a definitive agreement to be acquired by Musk in a transaction valued at about $44 billion. Once the transaction is complete, Twitter will become a privately held company.
Musk crowed about the acquisition—on Twitter, naturally— by reposting his own words from the press release announcing the deal:
In an all staff meeting on Monday at 2pm Pacific time, there were reportedly more questions than solid, long-term answers. Alex Heath, a tech reporter for The Verge, tweeted that a source told him Parag Agrawal will remain Twitter CEO, at least for the next six months until the deal with Musk closes. This was confirmed in another tweet by Bloomberg tech reporter, Kurt Wagner. Further, Agrawal also announced at the meeting that there would be no layoffs “at this time.” Heath tweeted that Agrawal’s closing statement was, “we don’t have all the answers. This is a period of uncertainty.”
Musk’s acquisition also means Twitter will likely no longer be governed by its existing board, and will no longer be publicly traded. “Twitter needs to be transformed as a private company,” Musk previously said in an SEC filing.
The purchase follows weeks of posturing by Musk and back-and-forth conversations between the billionaire and the Twitter board.
Why did Elon Musk buy Twitter?
Musk’s is both a frequent user of Twitter, and one of its most vocal critics. On March 25, Musk tweeted that “free speech is essential to a functioning democracy,” along with a yes/no poll asking his followers if they “believe Twitter rigorously adheres to this principle.” In a second tweet he hinted at big intentions and stated, “the consequences of this poll will be important. Please vote carefully.” With more than 2 million votes, the final poll result was 70.4% “No” to 29.6% “Yes.”
A day later, in two more tweets, Musk said, “given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” and “Is a new platform needed?”
(It’s important to point out here that Twitter actually has notably lax content moderation compared to other social media platforms. And that even less oversight could lead the site to become even more of a hub for disinformation and bot-manufactured extremist movements.)
On April 4, the world’s most terminally online billionaire announced that he had purchased 9.2% of Twitter’s stock shares, becoming the single largest stakeholder in the company. He also tweeted out another yes/no poll the same day, asking followers, “do you want an edit button?” Though Musk actually purchased the stock on March 24, he didn’t file the required SEC paperwork declaring the acquisition until 10 days later.
The next day, April 5, Twitter CEO Parag Agrawal announced that Musk would be appointed to the social media company’s board of directors. Backlash from Twitter employees as well as lots of other people on the internet prompted the platform to host an AMA (ask me anything) with the South African, Apartheid-era, emerald heir. And, just days later, on April 11, the deal fell through. Musk ended up not joining Twitter’s board, probably after learning that becoming a board member would prevent him from acquiring more than a 14.9% stake in the company.
Once it became clear the Dogecoin pioneer would no longer become a Twitter board member, Agrawal said, “I believe this is for the best,” in a statement directed to the rest of the board. Twitter investor Marc Rasella filed a lawsuit against Musk on April 12 for failure to disclose his 9.2% purchase quickly enough.
Then, on April 13, Musk filed paperwork with the SEC declaring his intention to buy 100% of Twitter at $52.40 per share in cash. He threatened that if his offer was not accepted, he would offload all of his 9.2% stake, effectively crashing the company’s stock. “My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” he said in Exhibit B of the SEC filing.“Twitter has extraordinary potential. I will unlock it,” he ominously added.
Following that announcement, Twitter’s board instituted a “poison pill” rights plan on April 15. The plan made it so that, if any one person were to acquire 15% or more of the company, other shareholders could then buy additional stock at a discount. Effectively, this meant Grimes’ on-and-off-again boyfriend couldn’t just outright buy all of Twitter without at least talking with the board first.
But nonetheless, Musk persisted. Twitter’s board entered negotiations with Musk on April 24. Between the announcement of those talks and Musk’s final purchase of the social media site, Dogecoin value rose by almost 9% and the stock tied to Former President Donald Trump’s social media venture, Truth, tanked by more than 5%. Trump founded the sparsely used platform after he was permanently banned from Twitter. And, if Twitter un-does bans like his, there will be even less of a reason for “Truth” to exist.
Around noon on Monday, Musk tweeted, “I hope that even my worst critics remain on Twitter because that is what free speech means.” Which, to be clear, is not what the First Amendment right to freedom of speech means. Nobody in the U.S. has a constitutional right to tweet or otherwise post on private social media platforms.
Musk is in good company with his misunderstanding. Florida Governor, Ron DeSantis, also doesn’t seem to grasp the definition of free speech. On Monday, he tweeted out, “@elonmusk’s offer to buy Twitter is a good deal for shareholders and raises the prospect that the platform will be a place where free speech can thrive, not a tool for narrative enforcement.”
What is likely to change once Elon Musk owns Twitter?
In the immediate: Twitter Inc. is in a code-freeze, not allowing product or platform updates unless, “business-critical,” according to unnamed sources quoted in a report by Bloomberg. This means that company employees are, for the time being, unable to change anything about the site without approval from a vice president. The move is a protective one, meant to prevent angry workers from “going rogue,” Bloomberg reported.
Longer term, although the edit button tweet and Musk’s emphasis on unmoderated “free speech” hint at his ideal Twitter-verse, it’s unknown exactly how the platform might change under his tutelage. Neither Twitter nor Musk immediately responded to Gizmodo’s request for comment.
In the statement announcing the acquisition, Musk reiterated lots of his previously tweeted comments and 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. I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the same bots, and authenticating all humans.”
Musk has repeatedly identified those “spam bots” as one of his focuses for the company:
Many observers have speculated that Musk is likely to use his control of the company to re-platform controversial public figures and news outlets that have previously been banned from the service. “If Musk buys Twitter, then he will surely return Trump to the platform, opening the door for a viable 2024 run,” Joan Donovan, research director of the Harvard Kennedy School’s Shorenstein Center on Media, Politics and Public Policy, tweeted Monday morning.
“My other thought is that Twitter, fwiw, will further become a terrain of culture wars,” Donovan continued. “With a mandate for “free speech,” the kind of harassment that content moderation tampers will go into overdrive targeting lgbtq groups, women, BIPOC, and anyone else fighting for civil rights.”
According to a poll released on April 5th by market research firm Ipsos, 40% of self-reported “heavy Twitter users” said they believe Musk’s purchase of the platform will “cause Twitter to allow greater free speech,” and 40% thought it would “improve the quality of discussion on the platform.”
How much is Musk paying?
Today’s agreement says that an unnamed entity wholly owned by Elon Musk will pay approximately $44 billion. Under the terms of the deal, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter.
Update 4/25/2022, 6:02 p.m. ET: This post has been updated most recently with new content from a Twitter all staff meeting.