Elon Musk Reaches Deal to Buy Twitter for $44 Billion | WIRED
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“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 press release announcing the news. Twitter independent board chair Bret Taylor described the deal as “the best path forward” for the company’s shareholders.
Musk’s accompanying letter to the chair of Twitter’s board was strident in its criticism of the platform. “I believe in [Twitter’s] potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” he wrote. However, he added, “I now realize the company will neither thrive nor serve this societal imperative in its current form.”
Instead, he wanted to take the company private, offering $44 billion for it in a “best and final” offer. At the time, analysts were split about the likelihood of Musk’s bid succeeding, and whether it was good value; while it sat in the middle of the usual 30 to 40 percent premium above the trading price, the stock price had reached well above that just last year. Twitter’s board, for its part, said it would evaluate the offer.
“He’s setting a bit of a precedent for activists that will go after a company,” says Timothy Galpin, senior lecturer in strategy and innovation at the Said Business School at the University of Oxford. “It’s been done a bit before by Carl Icahn and a few others, but it’s not as prevalent to go after the whole company.”
On the same day that he lodged his bid to take over the entirety of Twitter and take it private, Musk appeared at a TED talk in Vancouver, where he laid out his vision. “This is not a way to sort of make money,” he claimed. “My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important.” That gave some within Twitter, and those who held large shares in the platform, pause.
The confirmed funding reportedly caused some of Twitter’s shareholders who were more agnostic about Musk to petition the company to hear him out. Meetings reportedly took place over the weekend, and Twitter’s board met on April 25 to recommend the deal to shareholders. It was a swift and surprising reversal. “On Friday, there was so much skepticism and cynicism, and now it almost looks like a done deal,” says Vasant Dhar, a professor of information systems at NYU Stern. Musk’s quick movements have left other potential bidders stuck playing catchup. But the deal appears to have passed the money test, at least for Twitter’s board of directors, since “ the board’s fiduciary responsibility is to get the most value for shareholders,” says Galpin. “Obviously, there are questions about what he’ll do with the company if he takes control of it. He’s got to do more than just add an edit button. ”