Billionaire Elon Musk has reached an agreement to acquire Twitter for approximately $44 billion (€41 billion), the company said.
The outspoken Tesla CEO, the world’s wealthiest person, has said he wants to buy Twitter because he thinks it’s not living up to its potential as a platform for "free speech".
He says it needs to be transformed into a private company in order to build trust with users and do better at serving what he calls the "societal imperative" of free speech.
Twitter said it will become a privately held company after the sale is closed.
"Twitter has a purpose and relevance that impacts the entire world," its CEO Parag Agrawal said in a tweet. "Deeply proud of our teams and inspired by the work that has never been more important".
Musk describes himself as a "free-speech absolutist," although he hasn’t been exactly clear what he means by that.
In a recent TED interview, the billionaire said he’d like to see Twitter err on the side of allowing speech instead of moderating it.
What change will the deal bring for Twitter users?
He said he’d be "very reluctant" to delete tweets and would generally be cautious about permanent bans. He also acknowledged that Twitter would have to abide by national laws governing speech in markets around the world.
Musk himself, though, regularly blocks social media users who have criticized him or his company and has used the platform to bully reporters who have written critical articles about him or his company.
In recent weeks, he has voiced a number of proposed changes for the company, from relaxing its content restrictions - such as the rules that suspended former President Donald Trump’s account - to ridding the platform of fake and automated accounts and shifting away from its advertising-based revenue model.
Asked during a recent TED talk if there are any limits to his notion of "free speech," Musk said Twitter or any forum is "obviously bound by the laws of the country that it operates in. So obviously there are some limitations on free speech in the US, and, of course, Twitter would have to abide by those rules".
Beyond that, though, he said he’d be "very reluctant" to delete things and in general be cautious about permanent bans.
It won’t be perfect, Musk added, "but I think we want it to really have the perception and reality that speech is as free as reasonably possible".
"The Twitter Board could not find a white knight and with Musk’s financing detailed the clock has essentially struck midnight for the board which is why negotiations have begun to get a deal done," said Dan Ives, who follows Twitter for Wedbush Securities.
So, how did we get to this point?
Musk’s bid to buy Twitter gained steam over the weekend, with Twitter and Musk speaking on Sunday and into the early hours on Monday, The New York Times reported, less than two weeks after the billionaire first revealed a 9 per cent stake in the platform that he uses to promote his interests, attack critics and opine on social and economic issues to his more than 83 million followers.
Twitter’s board at first enacted an anti-takeover measure known as a poison pill that could have made a takeover attempt prohibitively expensive. But when Musk outlined the financial commitments he’d lined up to back his offer of $46.5 billion (€43.4 billion) — and no other bidders emerged — the board opened negotiations with him.
Musk said last week that he had lined up $46.5 billion (€43.4 billion) in financing to buy Twitter, putting pressure on the company’s board to negotiate a deal. Musk hasn't commented on the negotiations but on Monday waded into the buzz about them on Twitter, where some users are promising to quit the platform if he takes over.
"I hope that even my worst critics remain on Twitter, because that is what free speech means," he tweeted.
Musk has described himself as a "free-speech absolutist" but is also known for blocking or disparaging other Twitter users who question or disagree with him.
"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," Musk said in a statement announcing the takeover on Monday.
"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 spam bots, and authenticating all humans.
"Twitter has tremendous potential - I look forward to working with the company and the community of users to unlock it".
While Twitter’s user base of more than 200 million remains much smaller than those of rivals such as Facebook and TikTok, the service is popular with celebrities, world leaders, journalists, and intellectuals. Musk himself is a prolific tweeter with a following that rivals several pop stars in the ranks of the most popular accounts.
Who is Elon Musk, the new Twitter owner?
Musk is the world’s wealthiest person, according to Forbes, with a nearly $279 billion (€260 billion) fortune. But much of his money is tied up in Tesla stock - he owns about 17 per cent of the electric car company, according to FactSet, which is valued at more than $1 trillion (€933.7 billion) - and SpaceX, his privately held space company. It’s unclear how much cash Musk has.
Musk began making his fortune in 1999 when he sold Zip2, an online mapping and business directory, to Compaq for $307 million (€287 million).
He used his share to create what would become PayPal, an internet service that bypassed banks and allowed consumers to pay businesses directly. It was sold to eBay for $1.5 billion (€1.4 billion) in 2002.
That same year, Musk founded Space Exploration Technologies, or SpaceX, after finding cost constraints were limiting NASA’s interplanetary travel. The company eventually developed cost-effective reusable rockets.
In 2004, Musk was courted to invest in Tesla, then a startup trying to build an electric car.
Eventually, he became CEO and led the company to astronomical success as the world’s most valuable automaker and largest seller of electric vehicles.