Tesla CEO Elon Musk reaches deal to acquire Twitter for approximately $44B
TOM KRISHER and MATT O'BRIEN Associated Press
Billionaire Elon Musk has reached an agreement to acquire Twitter for approximately $44 billion, the company said.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Elon Musk’s bid to buy Twitter is gaining steam and could be announced as early as Monday, according to media reports about the social media company’s late-stage negotiations with the Tesla CEO, who has offered more than $40 billion to privatize the platform and pledged to be more lenient when it comes to policing users’ speech.
Twitter and Musk spoke Sunday and into the early hours Monday, The New York Times reported, less than two weeks after the billionaire first revealed a 9 percent stake in the platform that he uses to promote his interests, attack critics and opine on social and economic issues to his more than 83 million followers.
Musk said last week that he had lined up $46.5 billion in financing to buy Twitter, putting pressure on the company’s board to negotiate a deal. Musk hasn’t commented on the negotiations but on Monday waded into the buzz about them on Twitter, where some users are promising to quit the platform if he takes over.
“I hope that even my worst critics remain on Twitter, because that is what free speech means,” he tweeted.
Musk has described himself as a “free-speech absolutist” but is also known for blocking or disparaging other Twitter users who question or disagree with him.
In recent weeks, he has voiced a number of proposed changes for the company, from relaxing its content restrictions — such as the rules that suspended former President Donald Trump’s account — to ridding the platform of fake and automated accounts, and shifting away from its advertising-based revenue model.
Twitter’s board has flexibility in judging Musk’s proposal not just on the finances but also the specifics of his business plan and how it could affect users, advertisers and employees — some of whom might leave, said Kevin Kaiser, a finance professor at the Wharton School at the University of Pennsylvania.
“What’s critical for the board is whether they think it’s in the best interest of the company,” Kaiser said. “That can come from many, many factors.”
Kaiser said the board could decide that Musk’s plan has “too many negative impacts,” but that would be a hard case to make given how much Musk is offering to pay.
Asked during a recent TED talk if there are any limits to his notion of “free speech,” Musk said Twitter or any forum is “obviously bound by the laws of the country that it operates in. So obviously there are some limitations on free speech in the US, and, of course, Twitter would have to abide by those rules.”
Beyond that, though, he said he’d be “very reluctant” to delete things and in general be cautious about permanent bans.
It won’t be perfect, Musk added, “but I think we want it to really have the perception and reality that speech is as free as reasonably possible.”
Twitter had initially enacted an anti-takeover measure known as a poison pill that could make a takeover attempt prohibitively expensive. But the board decided to negotiate after Musk updated his proposal last week to show he had secured financing, according to The Wall Street Journal, which was first to report the negotiations were underway.
A rival bidder to Musk may not be stepping up any time soon, fearful of the byzantine task of moderating content on the platform, something that Musk has vowed to do less of.
“The Twitter Board could not find a white knight and with Musk’s financing detailed the clock has essentially struck midnight for the board which is why negotiations have begun to get a deal done,” said Dan Ives, who follows Twitter for Wedbush Securities.
The Times, citing people with knowledge of the situation who it did not identify, said the two sides were discussing details including a timeline and fees if an agreement was signed and then fell apart. The people said the situation was fluid and fast-moving.
While Twitter’s user base of more than 200 million remains much smaller than those of rivals such as Facebook and TikTok, the service is popular with celebrities, world leaders, journalists and intellectuals. Musk himself is a prolific tweeter with a following that rivals several pop stars in the ranks of the most popular accounts.
Shares of Twitter Inc. rose 5% Monday to $51.50 per share. On April 14, Musk announced an offer to buy the social media platform for $54.20 per share, or about $43 billion, but did not say at the time how he would finance the acquisition.
Last week, he said in documents filed with U.S. securities regulators that the money would come from Morgan Stanley and other banks, some of it secured by his huge stake in Tesla.
Twitter has not commented.
Musk is the world’s wealthiest person, according to Forbes, with a nearly $279 billion fortune. But much of his money is tied up in Tesla stock — he owns about 17% of the electric car company, according to FactSet, which is valued at more than $1 trillion — and SpaceX, his privately held space company. It’s unclear how much cash Musk has.
Musk began making his fortune in 1999 when he sold Zip2, an online mapping and business directory, to Compaq for $307 million. He used his share to create what would become PayPal, an internet service that bypassed banks and allowed consumers to pay businesses directly. It was sold to eBay for $1.5 billion in 2002.
That same year, Musk founded Space Exploration Technologies, or SpaceX, after finding that cost constraints were limiting NASA’s interplanetary travel. The company eventually developed cost-effective reusable rockets.
In 2004, Musk was courted to invest in Tesla, then a startup trying to build an electric car. Eventually he became CEO and led the company to astronomical success as the world’s most valuable automaker and largest seller of electric vehicles.
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Krisher reported from Detroit. O’Brien reported from Providence, R.I. AP Business Writer Kelvin Chan reported from London.
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AP Photo/Susan Walsh, File
Indeed he does. Musk’s 80.5 million Twitter followers make him one of the most popular figures on the platform, rivaling pop stars like Ariana Grande and Lady Gaga. But his prolific tweeting sometimes gets him into trouble when, for instance, he uses it to promote his business ventures, rally Tesla loyalists, question pandemic measures and pick fights with those with whom he disagrees.
In one famous example, Musk apologized to a British cave explorer who alleged the Tesla CEO had branded him a pedophile by referring to him as “pedo guy” in an angry — and subsequently deleted — tweet. The explorer filed a defamation suit, although a Los Angeles jury later cleared Musk.
He's also been locked in a long-running dispute with the U.S. Securities and Exchange Commission over his Twitter activity. Musk and Tesla in 2018 agreed to pay $40 million in civil fines and for Musk to have his tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at $420 per share — which didn't happen but caused Tesla's stock price to jump. His lawyer has contended that the SEC is infringing on Musk's free speech rights.
AP Photo/Susan Walsh, File
Indeed he does. Musk’s 80.5 million Twitter followers make him one of the most popular figures on the platform, rivaling pop stars like Ariana Grande and Lady Gaga. But his prolific tweeting sometimes gets him into trouble when, for instance, he uses it to promote his business ventures, rally Tesla loyalists, question pandemic measures and pick fights with those with whom he disagrees.
In one famous example, Musk apologized to a British cave explorer who alleged the Tesla CEO had branded him a pedophile by referring to him as “pedo guy” in an angry — and subsequently deleted — tweet. The explorer filed a defamation suit, although a Los Angeles jury later cleared Musk.
He's also been locked in a long-running dispute with the U.S. Securities and Exchange Commission over his Twitter activity. Musk and Tesla in 2018 agreed to pay $40 million in civil fines and for Musk to have his tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at $420 per share — which didn't happen but caused Tesla's stock price to jump. His lawyer has contended that the SEC is infringing on Musk's free speech rights.
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AP Photo/Matt Rourke, File
Musk has described himself as a “free speech absolutist” and has made clear that he doesn't think Twitter is living up to free speech principles — an opinion shared by followers of Donald Trump and several right-wing political figures who've had their accounts suspended for violating Twitter content rules.
But what's really driving Musk's Twitter involvement isn't clear. His preoccupations with the service include arguing to make Twitter’s algorithm viewable by the public, widening the availability of “verified” Twitter accounts, and blasting a profile photo initiative involving non-fungible tokens, or NFTs.
Musk has also called “crypto spam bots,” which search tweets for cryptocurrency related keywords then pose as customer support to empty user crypto wallets, the “most annoying problem on twitter.”
“We don’t know what his goals are,” said Jennifer Grygiel, a Syracuse University communications professor and an expert on social media. “Maybe Elon Musk secretly wants to blow (Twitter) up ... maybe he wants to destroy it.”
AP Photo/Matt Rourke, File
Musk has described himself as a “free speech absolutist” and has made clear that he doesn't think Twitter is living up to free speech principles — an opinion shared by followers of Donald Trump and several right-wing political figures who've had their accounts suspended for violating Twitter content rules.
But what's really driving Musk's Twitter involvement isn't clear. His preoccupations with the service include arguing to make Twitter’s algorithm viewable by the public, widening the availability of “verified” Twitter accounts, and blasting a profile photo initiative involving non-fungible tokens, or NFTs.
Musk has also called “crypto spam bots,” which search tweets for cryptocurrency related keywords then pose as customer support to empty user crypto wallets, the “most annoying problem on twitter.”
“We don’t know what his goals are,” said Jennifer Grygiel, a Syracuse University communications professor and an expert on social media. “Maybe Elon Musk secretly wants to blow (Twitter) up ... maybe he wants to destroy it.”
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Patrick Pleul/Pool via AP, File
Musk's role as both a board member and Twitter's largest shareholder certainly gives him an outsized voice in the company's future. He's been publicly praised this week by the CEO and other board members, a sign that Twitter leadership is likely to take his ideas seriously.
But he's still just one member of a 12-person board that Twitter says has “an important advisory and feedback role” but no responsibility over day-to-day operations and decisions. That means Musk won't have the authority to add an “edit button” or to restore Donald Trump's suspended account.
“Our policy decisions are not determined by the board or shareholders, and we have no plans to reverse any policy decisions,” said Twitter spokesperson Adrian Zamora.
Patrick Pleul/Pool via AP, File
Musk's role as both a board member and Twitter's largest shareholder certainly gives him an outsized voice in the company's future. He's been publicly praised this week by the CEO and other board members, a sign that Twitter leadership is likely to take his ideas seriously.
But he's still just one member of a 12-person board that Twitter says has “an important advisory and feedback role” but no responsibility over day-to-day operations and decisions. That means Musk won't have the authority to add an “edit button” or to restore Donald Trump's suspended account.
“Our policy decisions are not determined by the board or shareholders, and we have no plans to reverse any policy decisions,” said Twitter spokesperson Adrian Zamora.
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AP Photo/Richard Drew, File
Several Wall Street analysts said they were encouraged by Musk’s new role at Twitter. “This is a guy that does push for change, that does, I think, refuse to have failure on his resume. A perfect guy you need on the board of directors for them," said CFRA Research analyst Angelo Zino. That's true, Zino said, even if ”what exactly his ideas are, who the heck knows.”
Other investors aren't so sure. Meredith Benton, founder of the investment consulting firm Whistle Stop Capital, has been pushing for shareholders at both Twitter and Tesla to back stronger policies affecting workplace harassment and discrimination. She describes Musk's new role as a concerning development for Twitter investors, especially given accusations by California regulators that Tesla has been discriminating against Black employees at its San Francisco Bay Area factory.
“Twitter’s greatest current challenge is to navigate successfully through the societal implications of its platform’s use,” Benton said. "Elon Musk with his air of reckless bravado presents a risk of undermining thoughtful and strategic management of these topics."
AP Photo/Richard Drew, File
Several Wall Street analysts said they were encouraged by Musk’s new role at Twitter. “This is a guy that does push for change, that does, I think, refuse to have failure on his resume. A perfect guy you need on the board of directors for them," said CFRA Research analyst Angelo Zino. That's true, Zino said, even if ”what exactly his ideas are, who the heck knows.”
Other investors aren't so sure. Meredith Benton, founder of the investment consulting firm Whistle Stop Capital, has been pushing for shareholders at both Twitter and Tesla to back stronger policies affecting workplace harassment and discrimination. She describes Musk's new role as a concerning development for Twitter investors, especially given accusations by California regulators that Tesla has been discriminating against Black employees at its San Francisco Bay Area factory.
“Twitter’s greatest current challenge is to navigate successfully through the societal implications of its platform’s use,” Benton said. "Elon Musk with his air of reckless bravado presents a risk of undermining thoughtful and strategic management of these topics."
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AP Photo/Mary Altaffer, File
There has been executive turnover since co-founder Jack Dorsey's (pictured) departure in November left Twitter with a new CEO, Parag Agrawal, whose initial actions have involved reorganizing divisions. Wall Street analysts had approved of the choice of Agrawal as the new leader, but there have been no major changes to the platform yet. The company has long lagged behind its social media rivals and boasts far fewer users.
The mere fact of linking Musk's high-profile name to Twitter could get people to spend more time on on the platform and help it make more money, Zino said, calling Musk “the most important individual” at Twitter.
AP Photo/Mary Altaffer, File
There has been executive turnover since co-founder Jack Dorsey's (pictured) departure in November left Twitter with a new CEO, Parag Agrawal, whose initial actions have involved reorganizing divisions. Wall Street analysts had approved of the choice of Agrawal as the new leader, but there have been no major changes to the platform yet. The company has long lagged behind its social media rivals and boasts far fewer users.
The mere fact of linking Musk's high-profile name to Twitter could get people to spend more time on on the platform and help it make more money, Zino said, calling Musk “the most important individual” at Twitter.
‘Dr. Strange,’ Paula Patton’s fried chicken, the sanctioning of Putin’s daughters, and more top news
AP Photo/Matt Rourke, File
You wouldn't know it from his prolific posts, but he does hold several big roles, including CEO and “Technoking" of electric car company Tesla and CEO of the rocket company SpaceX. He is also the founder of The Boring Company, an underground tunnel company, and Neuralink, which wants to plant computer chips in people's brains.
AP Photo/Matt Rourke, File
You wouldn't know it from his prolific posts, but he does hold several big roles, including CEO and “Technoking" of electric car company Tesla and CEO of the rocket company SpaceX. He is also the founder of The Boring Company, an underground tunnel company, and Neuralink, which wants to plant computer chips in people's brains.
