It’s official. Elon Musk has officially purchased Twitter for $44 billion or $54.20 per share. This is according to a press release that just went live.
“Upon completion of the transaction, Twitter will become a privately held company,” the press release says. The purchase price represents a 38% premium to Twitter’s closing price on April 1, 2022. That was the last trading day before Musk announced he had a 9% stake on the company.
It all came down to no other bidders or white knights emerging in the M&A process, said Daniel Ives managing director at Wedbush Securities in a statement. "And Twitter's board back was against the wall once Musk detailed his $46 billion in financing last week to get pen to paper on this deal."
What's also interesting is that Twitter is supposed to report results later this week, and perhaps it felt pressure to do this deal know with Musk because the company's quarterly numbers were not looking so good, according to analysts.
"It makes you wonder just how bleak those numbers might be," said Matt Navarra, a social media consultant and industry analyst. "It's stagnated and flat lined for years when it comes to profits and new user growth."
Why Musk is taking Twitter private
So why take Twitter private? According to Musk, this move is about protecting free speech.
"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," said Mr. Musk in the release. "I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it."
At the recent TED 2022 conference, as reported by The Hollywood Reporter, Musk said it is really important that people have the reality and the perception that they are able to speak freely within the bounds of the law.”
At the time, Musk insisted that this was not a move to make money but to have “a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization.”
For Navarra, he foresees a "loosening of the rules when it comes to what people can say in a tweet." As a result, Twitter could move away from advertising revenue as the primary form of revenue, as marketers are "unlikely to place their brands next to toxic, abusive tweets."
What critics are worried about
Some critics have argued that Musk will allow voices back on the platform who have been banned for saying things that are dangerous to the public. Employees are also reportedly worried about this move. But Musk has said Twitter should go no further than complying with the law.
“If someone you don’t like is allowed to say something you don’t like, it’s damn annoying. [But] when someone you don’t like says something you don’t like, that is a function of a healthy free speech situation,” he said at the conference.
Musk has also gotten into hot water for his use of Twitter, especially around posts related to Tesla. As reported by CNBC, he came under SEC investigation after tweeting in 2018 that he had secured funding at $420 per share to take Tesla private. The agency charged Musk with securities fraud.
In another potential worrying sign, Twitter locked down any changes to its social networking platform through Friday after accepting the bid, according to Bloomberg. Product changes will require approval from a vice president, the sources said. Twitter reportedly "imposed the temporary ban to keep employees who may be miffed about the deal from 'going rogue.'"
"One thing's for sure," said Navarra. "We now have two rich white men in charge of the world's most popular social platforms which control what people can say and do online — something that many will find a very worrying development."
Will Trump rejoin Twitter?
Will Musk allow the likes of Donald Trump back on Twitter after the social network banned him in 2021? Musk has said he would generally prefer “time-outs” to permanent bans, but he has not commented specifically about the former president, who launched his own social network — Truth Social — earlier this year.
In fact, Trump has told Fox News that he will not return to Twitter even after Musk's purchase. The former president said that we will formally join Truth Social over the next seven days.
"I am not going on Twitter, I am going to stay on Truth," Trump said. "I hope Elon buys Twitter because he’ll make improvements to it and he is a good man, but I am going to be staying on Truth."
Where could 'freedom of speech' go on Twitter?
As noted, Musk has said that he's all about protecting free speech with this acquisition, but what could it mean for everyday users?
"It all depends on how 'freedom of speech' is implemented," said David Greene, civil liberties director and senior staff attorney for the Electronic Frontier Foundation. "It’s not as easy as simply abandoning the community standards and trust and safety teams and just letting everything get published...Consistent with history, what we see in such circumstances is that those who have been historically marginalized are the first ones cut out."
According to Greene, "Musk is not one who has in the past shown much concern for the freedom of speech for those [whose] freedom is truly threatened."
The Musk era on Twitter: Outlook
Elon Musk has not announced any concrete plans for Twitter, so it's too early to pass judgement. And he could actually do some good for the platform. Musk has mentioned adding the ability to edit tweets and allowing more people to get their accounts verified.
But some remain skeptical of Musk's potential long-term impact on the Twitter platform.
"Twitter needs a maverick. It needs an innovator. A disruptor," said Navarra. "The big question is whether Elon Musk, who can be all of those things, is going to be too disruptive and break the very things that made Twitter the digital town square he says is so important for the future."
For those of you who aren't confident about the effect Musk's ownership will have on the platform, you can always check out the best Twitter alternatives instead.