•Over 40 million Nigerians on microblogging platform
World’s richest man, billionaire Elon Musk has reached an agreement to acquire Twitter for approximately $44 billion, the company said.
According to the Associated Press (AP), Musk, the outspoken Tesla CEO, the world’s wealthiest person, had said he wants to buy Twitter because he thinks it’s not living up to its potential as a platform for “free speech.”
He said 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 would 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. 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.
The shares of Twitter, which has over 40 million Nigerians on its platform, were up 4.5 per cent in pre-market trading in New York at $51.15.
Musk, a prolific Twitter user, has said it needs to be taken private to grow and become a genuine platform for free speech.
The 50-year-old entrepreneur, 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.
He had said Twitter’s current leadership team was incapable of getting the company’s stock to his offer price on its own, but stopped short of saying it needs to be replaced.
“The company will neither thrive nor serve this societal imperative in its current form,” Musk said in his offer letter last week.
Up to the point Musk disclosed a stake in Twitter in April, the company’s shares had fallen about 10 per cent since Parag Agrawal took over as CEO from founder Jack Dorsey in late November.
The deal came just four days after Musk unveiled a financing package to back the acquisition. This led Twitter’s board to take his offer more seriously and many shareholders to ask the company not to let the opportunity for a deal slip away, Reuters reported on Sunday. Before Musk revealed the financing package, Twitter’s board was expected to reject the bid, sources had said.
The sale represented an admission by Twitter that Agrawal was not making enough traction in making the company more profitable, despite being on track to meet ambitious financial goals the company set for 2023. Twitter’s shares were trading higher than Musk’s offer price as recently as November.
Musk unveiled his intention to buy Twitter on April 14, and take it private via a financing package comprised of equity and debt.
Wall Street’s biggest lenders, except those advising Twitter, have all committed to provide debt financing.
Musk’s negotiating tactics – making one offer and sticking with it – resembles how another billionaire, Warren Buffett, negotiates acquisitions. Musk did not provide any financing details when he first disclosed his offer for Twitter, making the market skeptical about its prospects.