Elon Musk, the world’s wealthiest man, agreed to acquire Twitter for $44 billion on Monday, vowing a more liberal approach to police material on the social media network where he promotes his interests, criticizes opponents, and comments on a broad variety of subjects to over 83 million followers. Tesla’s outspoken CEO has said that he wants to acquire and privatize Twitter because he believes it is not living up to its promise as a free expression medium.
Musk said in a joint statement with Twitter that he wants to make the service “better than ever” with new features including eliminating automated “spam” accounts and making the site’s algorithms transparent to the public to boost confidence. “Free speech is the backbone of a functional democracy, and Twitter is the digital town square where things crucial to humanity’s future are discussed,” the 50-year-old Musk wrote in a post that included hearts, stars, and rocket emojis.
Many users are afraid that Musk’s more hands-off approach to content filtering would make the site more of a sanctuary for misinformation, hate speech, and bullying, which it has fought hard to combat in recent years. According to Wall Street experts, if he goes too far, he risks alienating advertising. The agreement was reached only two weeks after the billionaire announced he had a 9% share in the company. Musk said last week that he had secured $46.5 billion in funding to purchase Twitter, putting pressure on the board of directors to reach an agreement.
The deal was unanimously authorized by Twitter’s board of directors, and it is likely to conclude in 2022, assuming regulatory clearance and shareholder approval.
Twitter Inc.’s stock gained more than 5% to $51.70 per share on Monday. Musk made an offer to acquire Twitter for $54.20 per share on April 14. While the price has risen significantly since Musk’s offer, it remains much below its February 2021 high of $77 per share.
Musk has called himself a “free-speech absolutist,” yet he is also renowned for barring or criticizing other Twitter users who challenge or disagree with him.
He has recommended a variety of reforms for the firm in recent weeks, ranging from loosening content restrictions — such as the ones that banned former President Donald Trump’s account — to purging the site of phony and automated accounts and moving away from its ad-based income model. Musk thinks he can raise income by charging for memberships that provide a better experience for paying consumers, maybe even an ad-free version of Twitter.
Advertisers, as Twitter’s biggest customers, have been vocal in pushing for stricter content guidelines, which Musk has condemned. When asked whether there are any boundaries to his concept of “free expression” during a recent TED lecture, Musk stated Twitter or any other venue is “clearly governed by the laws of the nation that it runs in.” So, clearly, there are certain restrictions on free speech in the United States, and Twitter would have to follow those restrictions.”
Beyond that, he said he’d be “very hesitant” to remove anything and would be wary of permanently banning individuals who break the company’s policies. “But I believe we want it to genuinely have the illusion and reality that communication is as unfettered as practically feasible,” Musk continued.
Following the announcement of the partnership, the NAACP issued a statement urging Musk to deny former President Trump, the 45th president, access to the platform.
In a statement, the civil rights group added, “Disinformation, misinformation, and hate speech have NO PLACE on Twitter.” “Don’t let 45 go back on the platform.” Allowing Twitter to become a breeding ground for hate speech and lies that undermine our democracy is not an option.”
Trump utilized Twitter as a tremendous megaphone to communicate directly to the public throughout his campaign and administration, frequently employing fiery and divisive rhetoric on hot-button subjects. Following the assault of the Capitol on Jan. 6, he was permanently barred from serving.
Efforts to “deregulate” Twitter might jeopardize the company’s present commitment to make the network as secure as possible for all users, according to Brooke Erin Duffy, a Cornell University professor of communication and a social media specialist. ”
“The sorts of hatred and abuse that so frequently circulate in uncontrolled online areas are particularly susceptible to marginalized populations of users,” she added.
Musk puts Twitter ad money at risk, according to Forrester Research director Mike Proulx, if he chooses to alter content control measures. “Brands are becoming more aware of their proximity to harmful material or misinformation, so they may shift their spending to channels with more robust security procedures,” he added.
Some users stated on Monday that if Musk took over the network, they planned to leave. “I hope that even my harshest detractors stay on Twitter since that is what free expression means,” he wrote on Twitter. Musk has had several run-ins with the Securities and Exchange Commission, and he has used Twitter to taunt the regulators.
Musk’s August 2018 tweets, in which he claimed to have secured money to take Tesla private for $420 a share, were investigated by the SEC. In federal court, Musk is challenging an SEC subpoena in the case. More recently, Musk appears to have broken SEC requirements by neglecting to report when he reached a 5% position on Twitter and instead waited until he had more than 9%.
According to St. John’s University business expert Anthony Sabino, the SEC proceedings have no influence on Musk’s suitability to purchase a firm, making it unlikely that they would act as hurdles to the acquisition.
With its own reservations about the purchase, Twitter deployed a poison pill anti-takeover provision that might make a takeover effort prohibitively costly. According to The Wall Street Journal, the board chose to talk after Musk amended his proposal last week to demonstrate he had secured finance.
While Twitter’s user base of more than 200 million people is far lower than that of competitors such as Facebook and TikTok, celebrities, global leaders, journalists, and intellectuals utilize the site. Musk is a frequent tweeter, with a following that matches that of numerous music singers among the most popular accounts.
In filings filed with US securities authorities last week, he said that the funds will come from Morgan Stanley and other banks, with part of it backed by his massive holding in Tesla.
According to Forbes, Musk is the world’s richest individual, with a worth of almost $279 billion. However, most of his wealth is invested in Tesla shares — he owns roughly 17% of the electric vehicle firm, which is valued at more than $1 trillion, according to FactSet — and SpaceX, his privately-owned space enterprise. It’s unknown how much money Musk has.
When Musk sold Zip2, an online mapping, and business directory, to Compaq for $307 million in 1999, he made his fortune. He used his portion to create PayPal, an online service that allows customers to pay companies directly rather than via banks. In 2002, it was sold to eBay for $1.5 billion.
Musk launched Space Exploration Technologies, or SpaceX, the following year after discovering that NASA’s interplanetary flight was being hampered by budgetary restraints. The business finally created reusable rockets that were cost-effective.
Musk was approached in 2004 to invest in Tesla, which was then a company attempting to manufacture an electric vehicle. He eventually rose to the position of CEO, leading the firm to become the world’s most valuable manufacturer and the biggest seller of electric cars.
Musk’s commitment to make Twitter a safe haven for free expression may reduce the attraction of Donald Trump’s struggling Truth Social program, which the former president has promoted as a conservative alternative to Twitter. Truth Social is a subsidiary of Trump’s new media company, Digital World Acquisition Corp., which has agreed to take it public. DWAC shares fell 16.2 percent on Monday, and are down 46 percent since Musk announced his Twitter holding.