The Click Times: With this transaction, one of the world’s wealthiest people gains ownership of probably the most powerful platform on the Internet.
Elon Musk is purchasing Twitter and turning it into a private company.
The board of directors of Twitter overwhelmingly approved Musk’s bid to buy the social media network for $44 billion on Monday, the business reported.
The transaction puts one of the world’s wealthiest individuals in charge of arguably the internet’s most important platform. Musk, a frequent Twitter user, has slammed attempts to control what people say on the platform.
“Free speech is the core of a functional democracy, and Twitter is the digital town square where issues critical to humanity’s future are debated,” Musk stated in a tweet. “I also want to make Twitter better than it has ever been by adding new features, opening up the algorithms to boost trust, combating spam bots, and authenticating all people.” Twitter has enormous potential, and I’m excited to work with the company and the Twitter community to realise it.”
When the deal is completed, Twitter investors will receive $54.20 in cash for each share of Twitter common stock. It’s a 38% premium to Twitter’s closing stock price on April 1 — the final trading day before Musk revealed his roughly 9% ownership in the company.
In a statement, Twitter board chair Bret Taylor stated, “The Twitter Board completed a careful and extensive process to analyse Elon’s proposal with a deliberate focus on value, clarity, and finance.” “We think the proposed deal would provide a significant cash premium to Twitter’s investors, and we believe it is the best way ahead for Twitter’s owners.”
Musk bought a 9% interest in Twitter in early April, making him one of the company’s largest stockholders. Since then, Musk and the company have been locked in a corporate battle over the company’s future, with Musk initially agreeing to join the board, later announcing an acquisition offer, and Twitter attempting to thwart Musk’s acquisition with a corporate manoeuvre known as a “poison pill,” which is designed to thwart takeover attempts.
The poison pill was viewed as a stopgap tactic to prevent Musk from buying the social media network outright. The “pill,” also known as a shareholder rights plan, would have stopped Musk from buying more than 15% of Twitter shares on the open market by activating a clause that would have allowed Twitter to sell more shares, reducing Musk’s holdings’ value.
However, on April 20, Musk filed a securities statement revealing that he had secured $46.5 billion in finance arrangements from a group of banks led by Morgan Stanley in order to finalise a prospective acquisition. This may have placed pressure on Twitter’s board to take Musk’s offer more seriously.
Between the time current CEO Parag Agrawal was appointed as the social media platform’s newest head and April 14, when Musk revealed his massive ownership position, Twitter shares had lost 17 percent of their value.
Jack Dorsey, who co-founded Twitter and served as its CEO until November, applauded the decision, stating that the firm had “been dominated by Wall Street and the ad model” and that “taking it back is the necessary first step.”
“I don’t believe anyone should own or operate Twitter in principle,” Dorsey remarked. “On a protocol level, it aspires to be a public good, not a firm.” “Elon’s objective of establishing a platform that is’maximally trustworthy and broadly inclusive’ is the right one,” he added, referring to Musk as the “single solution” to the problem.
According to NBC, Lauri Brunner, senior portfolio manager for financial services organisation Thrivent’s big cap growth fund, which owns roughly $160 million in Twitter stock, Musk would be able to serve as a “catalyst” for producing excellent performance at Twitter because of his track record at Tesla. Thrivent Financial is a Tesla stakeholder as well.
“I believe Elon is quite forthcoming with his ideas and strategies,” Brunner remarked.
Derrick Johnson, president of the National Association for the Advancement of Colored People, issued a cautious statement in response to the announcement of the acquisition.
“Do not allow Twitter to become a breeding ground for hate speech or lies that undermine our democracy,” Johnson implored. “It is critical to safeguard our democracy, especially as the midterm elections approach. Mr. Musk: “Lives are on the line, and American democracy is in jeopardy.”
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