Twitter board agrees to $44 billion sale to billionaire Tesla founder Elon Musk

[EnterpriseSovereign]

Yep, Elon Musk is buying Twitter.

Twitter's board has agreed the social media company will be bought by Elon Musk for $44 billion (£34.6 billion).

The Tesla CEO, the world’s wealthiest person, said he wants to buy the social media platform because he thinks it’s not living up to its potential as a platform for “free speech".

He says it needs to be transformed as 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.

The social media company's CEO, Parag Agrawal, said in a tweet: "Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important."

Musk said in a statement: "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 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."

The deal was cemented roughly two weeks after the billionaire first revealed a 9% stake in the platform.

Musk said last week that he had lined up $46.5 billion in financing to buy Twitter, putting pressure on the company’s board to negotiate a deal.

Twitter said the transaction - which was unanimously approved by its board of directors - is expected to close sometime this year and is subject to the approval of Twitter stockholders and regulators.

Shares of Twitter Inc. rose 6% on Monday to $52 per share.

On April 14, Musk announced an offer to buy the social media platform for $54.20 (£40.80) per share.

While the stock is up sharply since Musk made his offer, it is well below the high of $77 (£60.45) per share it reached in February 2021.

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.

He has spoken in the past about his disagreements with the platform's stance on deleting tweets and deactivating accounts claiming it infringes free speech.

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."

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 the board decided to negotiate after Musk updated his proposal last week to show he had secured financing, according to The Wall Street Journal.
Musk is the world's richest person worth an estimated $287.6 billion (£219.5 billion) according to Forbes.

[Crazedwraith]

This is just so skeevy.

Free speech doesn't mean you can say anything you like a private platform. These ideas don't sound awful on paper but well... let's see what happens when some talks shit about Elon on twitter and if he walks the walk in regards to free speech.

[bilateralrope]

I see two ways for this to fail. The first is if he starts banning people for disagreeing with him. For example, that twitter account tracking Elon's jet.

The second if he's so against moderation that advertisers and other business partners flee because they don't want to be tainted by association. Just like many of those other "free speech" platforms.

Both happening is possible.

[Gandalf]

Is there another similar platform to which most of the user base can jump? By which I mean people who don't have the tick next to their name.

[bilateralrope]

If enough people are looking to leave Twitter, a new platform will emerge. But first Twitter needs to do something to drive people away.

[bilateralrope]

EU warns Elon Musk over Twitter moderation plans

EU commissioner Thierry Breton tells Tesla chief executive: "Elon, there are rules."
JAVIER ESPINOZA, FINANCIAL TIMES - 4/27/2022, 1:29 AM

Brussels has warned Elon Musk that Twitter must comply with the EU’s new digital rules under his ownership, or risk hefty fines or even a ban, setting the stage for a global regulatory battle over the future of the social media platform.

Thierry Breton, the EU’s commissioner for the internal market, told the Financial Times that Elon Musk must follow rules on moderating illegal and harmful content online after Twitter accepted the billionaire’s $44bn takeover offer.

Breton said: “We welcome everyone. We are open but on our conditions. At least we know what to tell him: ‘Elon, there are rules. You are welcome but these are our rules. It’s not your rules which will apply here.’”

Musk’s take-private deal for Twitter could transform the Tesla chief executive, who has used the platform to attack regulators and critics, into a social media baron, given that millions of people rely on the San Francisco-based platform for news.

He said on Monday that “free speech is the bedrock of a functioning democracy” and described Twitter as “the digital town square where matters vital to the future of humanity are debated.”

The comments from Breton, one of Europe’s most influential digital regulators, come just days after Brussels signed off a new piece of legislation that will force Big Tech to more aggressively police content online.

In pitching his offer for Twitter, Musk outlined plans to loosen the social media platform’s content moderation policies, describing himself as a “free speech absolutist.” Republican politicians in the US are hopeful that the deal could pave the way for Donald Trump to return to Twitter, after the former president was banned for repeatedly breaching its rules around hate speech and misinformation.

But Breton said he wanted to offer a “reality check” to Musk’s plans for less stringent moderation. The EU commissioner, who was key in negotiating the new Digital Services Act, warned that a lack of compliance from Twitter risked a ban for the platform in Europe.

He said: “Anyone who wants to benefit from this market will have to fulfil our rules. The board [of Twitter] will have to make sure that if it operates in Europe it will have to fulfil the obligations, including moderation, open algorithms, freedom of speech, transparency in rules, obligations to comply with our own rules for hate speech, revenge porn [and] harassment.”

“If [Twitter] does not comply with our law, there are sanctions—6 percent of the revenue and, if they continue, banned from operating in Europe,” he added.

The Digital Services Act forces the like of Twitter to disclose to regulators how they are tackling content such as disinformation and war propaganda. The groundbreaking rules are part of a bigger push by Brussels to curb the power of large online platforms, including Facebook and Google.

Last month, the EU also unveiled the Digital Markets Act, aimed at curbing the power of big tech, including a ban on platforms promoting their own services ahead of rivals.

That won't go well for Twitter if Musk tries to get them into a fight with the EU over this.

[Ralin]

Man. If the EU bans its citizens from accessing Twitter the smug from me and a bunch of other mainland China residents is going to be intense.

[EnterpriseSovereign]

Man. If the EU bans its citizens from accessing Twitter the smug from me and a bunch of other mainland China residents is going to be intense.

That would be the first and only good thing to come out of Brexit if that shit hits the fan.

[His Divine Shadow]

Pretty sure i remember Elon blocking and silencing dissenting views on his twitter as well as at his factories. He's no paragorn of free speech, only his speech, unopposed.

[Solauren]

Man. If the EU bans its citizens from accessing Twitter the smug from me and a bunch of other mainland China residents is going to be intense.

There are ways around bans.

[Ralin]

Man. If the EU bans its citizens from accessing Twitter the smug from me and a bunch of other mainland China residents is going to be intense.

There are ways around bans.

Do. Do you think I don't know that?

[bilateralrope]

Man. If the EU bans its citizens from accessing Twitter the smug from me and a bunch of other mainland China residents is going to be intense.

There are ways around bans.

Yes there are. But a ban would probably also involve Google and Apple pulling the Twitter app from their stores. Which leads to three questions:
- How many people will have the knowledge to bypass the ban ?
- How many people who know how will be willing to put in the effort ?
- How many of them will still want to use Twitter after whatever Musk did to trigger the ban ?

My guess is that most people will move to whatever platform emerges to replace Twitter in the EU.

[Ralin]

Maybe the EU will set up some sort of Great Firemoat to protect its citizens from all the dangerous propaganda and hate speech on Twitter. Though it's hard to imagine a government doing such a thing.

[bilateralrope]

Maybe the EU will set up some sort of Great Firemoat to protect its citizens from all the dangerous propaganda and hate speech on Twitter. Though it's hard to imagine a government doing such a thing.

It all depends on how bad Twitter gets under Musk. If Twitter stays as it is, it's probably safe. If people like these start being unbanned and behaving like they did before, that's another story.

[Gandalf]

Is there a point past which Musk can't retract his bid? Because I could also see him just going "lol nah" and backing away.

[Solauren]

Is there a point past which Musk can't retract his bid? Because I could also see him just going "lol nah" and backing away.

If he has any brains, the bid/offer probably has stipulations that would let him pull out as late has he can. So, if the sale was to be finalized say, August 1, he could pull out any time up to July 31st.

How much stock does Musk own of Twitter right now? This could be an attempt to run the price high and then sell his shares.

[EnterpriseSovereign]

Is there a point past which Musk can't retract his bid? Because I could also see him just going "lol nah" and backing away.

If he has any brains, the bid/offer probably has stipulations that would let him pull out as late has he can. So, if the sale was to be finalized say, August 1, he could pull out any time up to July 31st.

How much stock does Musk own of Twitter right now? This could be an attempt to run the price high and then sell his shares.

Wasn't it something like 9.5%?

[bilateralrope]

How much stock does Musk own of Twitter right now? This could be an attempt to run the price high and then sell his shares.

The SEC wouldn't like that. But he's already in one fight with them, so what's one more fight over price manipulation ?

[Solauren]

How much stock does Musk own of Twitter right now? This could be an attempt to run the price high and then sell his shares.

The SEC wouldn't like that. But he's already in one fight with them, so what's one more fight over price manipulation ?

I get the feeling that Musk doesn't give a shit about stuff like that.

After all, he can just move to just about anywhere he wants in the world,and threaten to take his businesses with him.

[bilateralrope]

How much stock does Musk own of Twitter right now? This could be an attempt to run the price high and then sell his shares.

The SEC wouldn't like that. But he's already in one fight with them, so what's one more fight over price manipulation ?

I get the feeling that Musk doesn't give a shit about stuff like that.

After all, he can just move to just about anywhere he wants in the world,and threaten to take his businesses with him.

Don't forget about the time Tesla allowed people to play games on the cars center console while the car was in motion. Or when they enabled rolling stops. Both of which were illegal, but Tesla didn't care. Not until the authorities stepped in.

I get the feeling that Musk doesn't think the law applies to him, which might delay him thinking about running until he's in serious trouble. Unlike other billionaires who know the law applies to them, so they get it changed if it becomes annoying.

There is also the question of which country he might flee to.

[Ralin]

I get the feeling that Musk doesn't think the law applies to him,

It does?

[Solauren]

I get the feeling that Musk doesn't think the law applies to him,

It does?

Well, this is the guy that thinks Nuking Mars to make it warm enough to colonize is a viable idea.
And he's got his own space agency.....

Huh, I think I know his 'escape plan' now....

[bilateralrope]

Elon Musk says his deal to buy Twitter is on hold

By David Goldman, Chris Isidore and Clare Duffy, CNN

Updated 1937 GMT (0337 HKT) May 13, 2022

London (CNN Business)Elon Musk said he is putting his bid to acquire Twitter (TWTR) on hold, weeks after agreeing to take the company private in a $44 billion deal.

"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk tweeted on Friday.
The news initially sent Twitter shares down more than 20% in pre-market trading before the stock rebounded somewhat. Two hours after his first tweet, Musk posted that he is "still committed to acquisition."
In his tweet about putting the deal on hold, Musk linked to a May 2 Reuters report about Twitter's most recent disclosure about its spam and fake account problem.
In its quarterly financial report, released on April 28, Twitter estimated that fake or spam accounts made up fewer than 5% of the platform's active users during the first three months of the year. Twitter noted that the estimates were based on a review of sample accounts and it believed the numbers to be "reasonable."
But it acknowledged that the measurements were not independently verified and the actual number of fake or spam accounts could be higher.
Twitter has had a spam problem for years, and the company has previously acknowledged that reducing fake and malicious accounts would play a key factor in its ability to keep growing. It's unclear why Musk would back away from the deal because of the latest disclosure.

A 'circus'
Musk turned "this Twitter circus show into a Friday the 13th horror show," wrote tech analyst Dan Ives of Wedbush Securities in a note to clients early Friday.
Musk would owe Twitter a $1 billion breakup fee if he were to cancel the deal.
"The Street will view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away from the deal with a $1 billion breakup fee," Ives wrote. "Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market."
Stocks — tech in particular — have been sharply lower since Musk and Twitter reached a deal on a purchase of the the company nearly three weeks ago.

Flouting convention
The manner in which Musk announced the deal's pause — in a tweet -— was also unusual, at least by normal corporate merger and acquisition standards.
Acquirers of a company typically conduct due diligence, a review of the firm's finances and proprietary information, before a deal closes. In that process, they may come across information that causes them to rethink the deal or its valuation, but typically such a revelation would be disclosed in a filing with the Securities and Exchange Commission.
"Usually we'd see some sort of filing that would come first, an amendment to previous filings on the deal, that says, 'we've uncovered some information in the process of due diligence and we're reconsidering our acquisition,'" said Josh White, an assistant professor of finance at Vanderbilt University and a former financial economist for the SEC.
"This happens as you get access to the books and access to proprietary information. What doesn't normally happen is a tweet," White said.
The unusual move may not be significant enough to warrant SEC action, White said, but it could draw the attention of Twitter's lawyers. As part of the deal, Musk agreed to consult with Twitter before making any public statements about the deal, and to avoid making any tweets that "disparage the company," according to filings with the SEC. Still, Twitter's board will likely prefer the deal to go through because of its strong valuation compared to the company's current stock price.
But if the deal falls apart, "I would expect Twitter's current shareholders to potentially bring a lawsuit" saying Musk's actions had damaged them by tanking the stock price, White added.
Twitter did not return a request for comment on Musk's Friday tweets.

Skepticism from the start
Even as Musk has worked to secure financing for the takeover, skepticism about whether the deal would go through has been swirling since Twitter's board agreed to the offer on April 26.
Musk said he would buy Twitter for $54.20 a share. But Twitter's stock never approached that price, hovering below $50 for weeks. That was a sign investors were skeptical that Musk would ultimately make good on his offer.
Wall Street analysts weren't convinced of Musk's ability to buy Twitter, either — at least not at $54.20 a share. The consensus target price was below $52, and the vast majority put a "hold" rating on the company's stock.
Part of the problem has been Twitter's connection to Tesla's (TSLA) fate. Musk, Tesla's CEO, was planning to borrow against part of his Tesla stake to finance the deal, but Tesla's stock has been sinking fast alongside most other stocks this year.
Musk's sale of a significant number of Tesla shares to help finance his Twitter deal had also put pressure on the carmaker's stock. Having already committed a big chunk of his Tesla shares elsewhere, he wasn't left with much of a cushion should he need to pony up more funds to complete the Twitter takeover.
Ives said the news about the Twitter deal was good for Tesla (TSLA) shares, which roared 6% higher in premarket trading Friday. Shares of Tesla, the world's most valuable automaker, have lost about a third of their value since Musk disclosed he had taken a stake in Twitter.
In addition to selling $8.5 billion of his Tesla shares last month, or about 6% of his holdings, Musk was using his shares of Tesla as part of the collateral he needed to raise cash for the Twitter purchase. But the drop in the value of Tesla shares had raised doubts if he would be able to move forward with the financing of the Twitter deal.
The Wall Street Journal has also reported that the SEC and the Federal Trade Commission were both looking Musk's purchases of Twitter earlier this year and whether he properly disclosed them.

Musk's plans for Twitter
Musk had offered few details about his plans for the social media company, though he has often spoken out about bot accounts that promoted spam content. He also says the company has been too quick to remove accounts that violate its content-moderation rules.
On Tuesday, Musk made headlines by saying he would allow former President Donald Trump to return to Twitter once the takeover was complete. Trump's account was permanently removed after his followers' attack on the US Capitol on January 6, 2021.
Earlier this week Twitter confirmed that it is pausing most hiring and backfills, except for "business critical" roles, and pulling back on other non-labor costs. It also confirmed that two top executives, general manager of consumer Kayvon Beykpour, and revenue product lead Bruce Falck, were leaving the company.
Twitter CEO Parag Agrawal sent a series of tweets Friday afternoon acknowledging the leadership shakeup at the company the previous day.
"Some have been asking why a 'lame-duck' CEO would make these changes if we're getting acquired anyway," Agrawal said. "While I expect the deal to close, we need to be prepared for all scenarios and always do what's right for Twitter. I'm accountable for leading and operating Twitter, and our job is to build a stronger Twitter every day."
-— CNN Business' Clare Duffy and Allison Morrow contributed to this article.

Sounds like Musk is having second thoughts about the acquisition.

[EnterpriseSovereign]

He was also making noises about revoking Trump's ban from the platform so this might be a good thing.

[bilateralrope]

Another article about Musk questioning the deal. Most of it is nothing new, so I'll only quote the interesting bit:

Musk's ability to get more details from Twitter may be limited because his offer to buy the company waived "business due diligence." Twitter said one of the reasons its board accepted Musk's offer is "the likelihood that other potential acquirers would require substantial due diligence, creating a delay and risk to reaching the signing of such a potential transaction."

How high was Musk when he agreed to this deal ?