After going back and forth, Elon Musk got what he wanted: to be the owner of Twitter. The little bird’s social network announced that it reached a definitive agreement to be acquired by an entity wholly owned by the tycoon. The purchase was for $54.20 per share in cash, which would value the company at approximately $44 billion. Once the transaction is complete, Twitter will become a private company.
Under the terms of the agreement, the shareholders of Twitter will receive $54.20 in cash for each share of Twitter they hold at the closing of the proposed transaction. The purchase price represents a 38% premium to the closing price of the shares of Twitter on April 1, 2022, the last trading day before Musk would disclose its approximately 9% stake in the social network.
Brett Taylorindependent chairman of the board of directors of Twittersaid: “The board of directors of Twitter conducted a thoughtful and comprehensive process to evaluate the proposal for Elon with a deliberate focus on value, certainty and financing. The proposed transaction will generate a substantial cash premium, and we believe it is the best path forward for the shareholders of Twitter“.
On the other hand, Parag Agrawal, CEO of Twitterassured: “Twitter it 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.”
The transaction, which was unanimously approved by the Board of Directors of Twitter, it closes this year. However, we must wait for the approval of the shareholders of Twitterreceipt of applicable regulatory approvals, and satisfaction of other customary closing conditions.
The purchase of Twitter by Musk it began to be commented on earlier, when the tycoon tweeted on his account a message dedicated to his critics that hinted that the social network could have changed its mind: “I hope that even my worst critics remain in Twitter, because that is what freedom of expression means”
I hope that even my worst critics remain on Twitter, because that is what free speech means
— Elon Musk (@elonmusk) April 25, 2022
The owner of Tesla, SpaceX and the richest man on the planet, laid out his plan to fund the deal in a Securities and Exchange Commission (SEC) filing last Thursday, which includes $25.5 billion in loans and $21 billion in personal capital. Analysts believe the loans could cost Twitter up to $1 billion a year in service fees, or about 20 percent of the company’s annual revenue.
Recall that shortly after Musk announce the purchase plan, the meeting of Twitter, to avoid the transaction, instituted a “poison pill” measure (which consists of selling the shares at a lower cost to existing shareholders and limiting the number of shares that a single shareholder can have). However, there was something that made them change their minds and they made the decision to become a private company, which means that it will no longer be publicly traded. It’s unclear what led to the company’s change of heart, but a New York Times report described employees at Twitter they were divided by the news and that they received little information about the conversations that were taking place about it.
What changes will Musk make to Twitter?
As for your future plans Musk for the social network, he said: “Freedom of expression is the foundation of a functioning democracy, and Twitter It is the digital public square where vital issues for the future of humanity are debated. I also want you to Twitter be better than ever by improving the product with new features, making algorithms open source to increase trust, defeating spam bots, and authenticating all humans. Twitter it has enormous potential. I look forward to working with the company and the user community to unlock it.”
Also, let’s not forget that shortly after you have purchased more than 9% of the shares of Twitter, Musk had done a survey on the social network about the option to edit tweets, which is already being developed. She later suggested removing the ads from Twitter Bluecontent deregulation, longer tweets, lower subscription price, add Dogecoin as a payment option and we’ll see what else.