Elon Musk, a billionaire entrepreneur, agreed to buy Inc for $44 billion in cash, using one of the world's largest leveraged buyout deals to take private a 16-year-old social networking site that has become a focal point of public debate and a flashpoint in the argument over online free speech.
Investors will receive $54.2 for each Twitter share they own, according to a statement released by the business on Monday. The price is 38% higher than the stock's close on April 1, the last business day before Musk revealed a large stake in the company, causing a share rally.
The announcement caused a halt in Twitter shares. “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 the statement.
“Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.” “Twitter has a purpose and relevance that impacts the entire world,” its CEO Parag Agrawal tweeted.
“Deeply proud of our teams and inspired by the work that has never been more important.” The all-cash transaction is likely to close later this year. According to Musk, the purchase will be funded with $25.5 billion in debt and margin loan financing, as well as $21 billion in equity.
Going private is a major shift for a firm that began as a messaging service for exchanging status updates with friends but quickly evolved into a platform for users to broadcast brief posts of 140 characters or less to a large audience.
Twitter became popular among politicians, celebrities, and journalists, and it joined social media heavyweights Facebook and YouTube as a standard-bearer of Web 2.0, a new, more interactive way of using the internet.
Musk, who has more than 83 million followers on Twitter, began amassing a 9 percent stake in the company in January. By March, he had increased his criticism of Twitter, claiming that its algorithms are biased and that its feeds are clogged with automated junk posts. He also claimed that bots were inflating Twitter's user growth.
He offered to take Twitter private on April 14 after rejecting an invitation to join the company's board of directors, saying he'd make the platform a stronghold of free speech and dropping other hints about the changes he'd make as an owner. The suggestions ranged from the practical - such as allowing users to edit tweets and combating bots - to the bizarre, such as a proposal to turn the company's San Francisco headquarters into a homeless shelter.
Following its inception in 2006, Twitter has faced a number of setbacks, including management changes that resulted in the resignation of co-founder Jack Dorsey in the early days of the firm and his ultimate return in 2015.
Following an IPO in 2013, the firm contemplated selling itself in 2016, attracting attention from companies ranging from Walt Disney Co. to Salesforce Inc. Dorsey clashed with an activist investor in 2020, forcing Twitter to set specific growth targets and increase board accountability. Dorsey's eventual second departure was triggered by this, allowing him to focus on his other firm, Block Inc, which specializes in digital payments.
