Elon Musk clinches $44bn deal to buy Twitter

Published April 26, 2022
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer. —Reuters
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer. —Reuters

NEW YORK: Elon Musk clinched a deal to buy Twitter Inc for $44 billion cash on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.

It is a seminal moment for the 16-year-old company that emerged as one of the world’s most influential public squares and now faces a string of challenges.

Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.

Under pressure, Twitter started negotiating with Musk to buy the company at the proposed $54.20 per share price.

“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.

Shares were up about six percent following the news. The deal represents a near 40 percent premium to the closing price the day before Musk disclosed he had bought a more than nine percent stake. Even so, the offer is below the $70 range where Twitter was trading last year.

The transaction was approved by the board and is now subject to a shareholder vote.

In a prepared statement the company said Musk secured $25.5 billion of debt and margin loan financing and is providing a $21 billion equity commitment.

It was not immediately clear what the breakup fee would be or who would run the new company.

The 50-year-old Elon Musk, who is also CEO of rocket developer SpaceX, has said he wants to combat trolls on Twitter and proposed changes to the Twitter Blue premium subscription service, including slashing its price and banning advertising.

The billionaire, a vocal advocate of cryptocurrencies, has also suggested adding dogecoin as a payment option on Twitter.

Up to the point Musk disclosed a stake in Twitter in April, the company’s shares had fallen about 10pc since Parag Agrawal took over as CEO from founder Jack Dorsey in late November.

Outsized importance

Twitter’s outsized importance as a mouthpiece for politicians, political dissidents and activists belies its relatively small size.

Although it is only about a tenth of the size of far larger social media platforms like Meta Platforms Inc’s Facebook, it has been credited with helping spawn the Arab Spring uprising and accused of playing a role in the Jan 6, 2021, storming of the US Capitol.

After Twitter banned former president Donald Trump over concerns around incitement of violence following last year’s Capitol attack by his supporters, Musk tweeted: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”

Republicans on Monday cheered the news of a possible Musk buyout of Twitter, betting on Trump’s reinstatement on the service.

Published in Dawn, April 26th, 2022

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Beefing up security

Beefing up security

The issue lies not in the sincerity and dedication of Pakistan’s law enforcement but in their capacity and access to effective surveillance equipment.

Editorial

Concerning measures
Updated 03 Nov, 2024

Concerning measures

The govt must seek political input and consensus on the changes it is seeking to make and be open about its intentions.
Short-lived relief?
03 Nov, 2024

Short-lived relief?

POLICYMAKERS must be jumping with joy. At the close of the first quarter of FY25, the budget posted a consolidated...
Brisk spread
03 Nov, 2024

Brisk spread

THE surge in polio cases has reached distressing levels with a tally of 45 last reported, after two cases emerged in...
Ultimate price
Updated 02 Nov, 2024

Ultimate price

To dismantle culture of impunity for crimes against journalists, state must ensure that perpetrators do not go unpunished.
Mastung bombing
02 Nov, 2024

Mastung bombing

INSTABILITY continues to haunt Balochistan, as Friday morning’s bombing in Mastung has shown. At least nine...
Plane speak
02 Nov, 2024

Plane speak

DESPITE all its efforts to facilitate PIA’s privatisation, it seems the government only ended up being taken for a...