Elon Musk on Monday struck a deal to buy Twitter for around $44 billion, 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 premium of 38 percent to the company’s share price this month, before announcing that he was the company’s largest single shareholder was. According to data compiled by Dealogic, it would be the biggest deal to privatize a company — something Mr. Musk has announced he would do with Twitter — in at least two decades.
“Freedom of expression is the bedrock of a functioning democracy, and Twitter is the digital marketplace where important issues affecting 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 caps the seemingly unlikely attempt by the infamous Mr Musk, 50, to buy Twitter – and immediately raises questions about what he will do with the platform and how his actions will impact online speech around the world .
The billionaire, who has more than 83 million followers on Twitter and has raged over the service, which hurls quibbles and memes, has repeatedly said he wants to “transform” the platform by encouraging more freedom of speech and giving users more control over what you see on it . By taking the company private, Mr. Musk was able to work on the service out of the sight of the prying eyes of investors, regulators, and others.
However, the test is likely to be intense. Twitter isn’t the biggest social platform — it has more than 217 million daily users, compared to billions on Facebook and Instagram — but it has played an outsized role in shaping narratives around the world. Politicians have turned it into a megaphone, while corporations, celebrities and others have used it to enhance their image and build brands.
Twitter has also come under criticism in recent years, with some users posting misinformation and other toxic content on the service. Former President Donald J. Trump frequently took to Twitter to insult and incite him until he was banned from doing so after last year’s Jan. 6 riots in the Capitol. The company has repeatedly created policies on the fly to deal with unexpected situations.
Mr. Musk himself has had a rocky relationship with online speech. That year he tried to take down a Twitter account tracking his private jet, citing personal and security reasons. And he’s gotten in trouble with regulators over his tweets.
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 hopes to boost 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 at UltraViolet, a women’s rights organization, said Mr Musk’s deal could be treacherous for online speech because it may not be for Twitter’s community standards and bans users who violate those standards.
“That’s a massively slippery slope,” she said.
In Washington, Republicans, who have long accused Twitter of censoring their views, hailed Mr Musk’s deal.
“I am confident that Elon Musk will help stem Big Tech’s history of censoring users who take a different viewpoint,” Tennessee Senator Marsha Blackburn said in one tweet.
Mr Trump told Fox News on Monday that he would stick with posting on his own social network, Truth Social. “I don’t go on Twitter,” he said, but added that he hopes “Elon buys Twitter because he’s going to make improvements to it.”
The Democrats were reticent about the deal. Jen Psaki, the White House press secretary, declined to comment specifically on the sale of Twitter, but said President Biden “has long had concerns about the power of major social media platforms” and that she “supports the damage caused to them should be held accountable”. She said Mr. Biden supports changes to online language and antitrust laws.
Language issues aside, Twitter faces questions about its business. For years, the company has struggled to attract new users and persuade others to return. The advertising business, which is Twitter’s primary source of revenue, has been mixed. Twitter hasn’t made a profit in eight of the last 10 years.
Last year, the company lost $493 million on sales of $5.57 billion. In contrast, Meta, the company formerly known as Facebook, had $39 billion in earnings and $118 billion in revenue last year.
Twitter, which went public in 2013, also has a turbulent company history behind it. It has repeatedly faced board troubles 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 on Twitter, urging Jack Dorsey, one of its founders, to step down as chief executive. Mr. Dorsey resigned last year.
“This company is very underfunded, especially compared to other platforms and competitors like Facebook,” said Pinar Yildirim, a professor of marketing at the University of Pennsylvania’s Wharton School of Business. “If you look at it from pure business value, there’s definitely room for improvement.”
In a statement, Twitter chairman Bret Taylor said the board had conducted “a thoughtful and comprehensive process” on Mr. Musk’s offer and that the deal would yield “a significant cash reward” for shareholders.
Regulators are unlikely to seriously challenge the transaction, former antitrust officials said, since the government most often steps in to halt a transaction when a company buys a competitor.
The deal came about within a few weeks. Mr. Musk, who also runs electric-car maker Tesla and rocket maker SpaceX, began buying shares of Twitter in January and announced this month that he had acquired a more than 9 percent stake.
That immediately sparked a guessing game about what Mr. Musk planned to do with the platform. Twitter executives initially welcomed him to the board, but he changed course within days and instead began an offer to buy the company outright.
An agreement initially seemed unlikely because the entrepreneur did not say how he would finance the deal. Twitter officials were also skeptical, as it was difficult to see how much Mr Musk could be joking. For example, in 2018 he tweeted that he was planning to take Tesla private, falsely claiming he had “secured the funding” for such a deal.
Twitter responded to Mr Musk’s offer with 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 $46.5 billion in pledges to fund his bid for 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 shares of Tesla. He was expected to add about $21 billion in equity funding. Twitter did not give details of the equity financing on Monday. No terms were set on Mr Musk’s funding either, which would prevent him from completing the deal.
The funding commitments forced Twitter to seriously consider Mr Musk’s offer, people familiar with the situation said, especially as he threatened to make the offer directly to shareholders in a hostile bid.
Over the weekend, the billionaire’s Twitter executive and dealmakers negotiated the terms of the purchase in a series of calls and video conferences. The teams worked on the final details late Sunday and into Monday.
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 wants to be on Twitter is unclear. Among the unanswered questions are who he might choose to run the company and how much involvement he would have in running the service. Besides 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 boss Parag Agrawal took over in November. Mr Agrawal has been working to “decentralize” the social network so Twitter makes fewer content moderation decisions and users have more control over their social feeds. He is expected to remain in office at least until the deal is finalized.
How many of the Twitter staff want to follow Mr Musk’s vision is also uncertain. Some were frustrated by the lack of communication about the takeover battle.
At a meeting with staff on Monday afternoon, Mr Agrawal and Mr Taylor, the chairman, nodded to the emotions of the day and how staff most likely processed the news of a sale.
“It’s important to recognize that you all have many different feelings about what is happening,” Mr Agrawal said at the meeting, which The New York Times was listening to. He said it could take three to six months for the deal to close, so “right now we’re running Twitter like we’ve always done it.”
The deal, which has been approved by Twitter’s board of directors, is expected to close later this year, subject to a shareholder vote and certain regulatory approvals.
At the staff meeting, Mr Agrawal acknowledged the uncertainty ahead. “Once the transaction closes, we don’t know where this company will go,” he said.
Kate Conger, Cecilia Kang and David McCabe contributed coverage.