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Friday, Apr 26, 2024

Elon Musk, world’s richest man and freedom of speech czar, reaches deal to buy Twitter for $44bn

Elon Musk, world’s richest man and freedom of speech czar, reaches deal to buy Twitter for $44bn

Tesla chief executive will gain control over social network he has criticized over its handling of ‘free speech’

Elon Musk has reached a $44bn deal to buy Twitter in a takeover that will give the world’s richest man control of a social network with more than 200 million users.

The sale will put the Tesla chief executive in charge of a company that he has frequently criticized, claiming it has not lived up to its potential as a platform for “free speech”.

The deal on Monday comes after a dramatic few weeks of speculation about Twitter’s future, triggered by Musk’s emergence as the platform’s largest single shareholder on 4 April. He then declared a takeover bid on 14 April, offering to buy all Twitter’s shares for $54.20 each.

At first, Twitter’s board seemed opposed, enacting an anti-takeover measure known as a poison pill that could have made a takeover attempt prohibitively expensive. But its initial reluctance to accept a transaction appeared to fade after Musk confirmed a funding package for the deal – including $21bn of his own money, alongside debt funding from Morgan Stanley and other financial institutions – and shareholders warmed to it.

“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 statement posted to Twitter. “Twitter has tremendous potential – I look forward to working with the company and users to unlock it,” he added.


Twitter said the transaction had been unanimously approved by its board of directors and was expected to close in 2022, pending regulatory sign-off and the approval of shareholders. The platform has 217 active daily million users.

“Twitter has a purpose and relevance that impacts the entire world,” Twitter’s chief executive, Parag Agrawal, said in a tweet confirming the sale. “Deeply proud of our teams and inspired by the work that has never been more important.”

The Musk takeover has been unexpected and controversial amongst Twitter employees. Speaking at an all-hands meeting on Monday following news of the deal, Agrawal told employees that the future direction of the social network was uncertain.

“Once the deal closes, we don’t know which direction the platform will go,” Agrawal said. Musk will join Twitter staff for a question-and-answer session at a later date, the company told employees.

The company, which launched in 2006, currently has a market cap of nearly $40bn. Its co-founder Jack Dorsey stepped down as chief executive officer in November 2021, handing the reins to Agrawal, the company’s former chief technology officer.

Musk is himself a prominent user of the app, with 83m followers, and tweeted as early as 2017 expressing interest in buying the company. He has signalled that Twitter 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.

“I hope that even my worst critics remain on Twitter, because that is what free speech means,” he tweeted on Monday.

The Twitter headquarters in San Francisco.


It remains to be seen how Musk will reshape the company, but the billionaire has proposed several changes in recent weeks. They include relaxing its content restrictions, ridding the platform of fake and automated accounts, and shifting away from its advertising-based revenue model.

Elaborating on his goals, Musk added on Monday that he wanted 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”.

Musk has long been a popular if contentious figure on the platform. And despite claiming to be a “free speech absolutist”, Musk regularly blocks social media users who have criticized him or his company and has used the platform to bully reporters who have written critical articles about him or his company.

The deal is not expected to face serious scrutiny from US competition authorities because Musk’s other major business interests – Tesla, an electric car company, the SpaceX rocket business, and the tunnelling firm the Boring Company – do not compete with Twitter.

It is, however, likely to draw comment from politicians and campaigning bodies given Twitter’s influence as an information source and Musk’s stance on free speech. The purchase also comes amid intensifying criticism of big tech’s power and underscores the ability of wealthy executives to control platforms used by millions.

“No matter who owns or runs Twitter, the president has long been concerned about the power of large social media platforms,” the White House spokeswoman Jen Psaki commented on the purchase on Monday.

Senator Elizabeth Warren called the deal “dangerous for our democracy”. “Billionaires like Elon Musk play by a different set of rules than everyone else, accumulating power for their own gain,” she tweeted.

Rebecca Allensworth, professor of law at Vanderbilt University, described the deal as “troubling” due to the amount of power now wielded by Musk, a concern shared by many others.

“There is something deeply troubling about a privately-held company holding the power Twitter does over public speech, especially if Twitter will be controlled by someone with as idiosyncratic views about speech as Musk. American free speech law is essentially just the first amendment, which only constrains government actors, not a company like Twitter or a person like Elon Musk,” she said.

Speculation has already begun as to whether Musk will reinstate high profile accounts that have previously been removed for violating community guidelines, including that of Donald Trump. Trump was permanently banned from Twitter in 2021 for his use of the platform to incite unrest at the US capitol.

Elon Musk’s takeover of Twitter has raised concerns about the future direction of the platform.


After the deal was announced, the NAACP released a statement that urged Musk not to allow the 45th president back on to the platform.

“Disinformation, misinformation and hate speech have NO PLACE on Twitter,” the civil rights organization said in a statement. “Do not allow 45 to return to the platform. Do not allow Twitter to become a petri dish for hate speech, or falsehoods that subvert our democracy.”

Trump has so far said he would not return to Twitter if his account were reinstated, telling Fox News on Monday: “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,” a reference to his own startup Truth Social.

Suzanne Nossel, chief executive officer of PEN America, a non-profit organization that works to protect freedom of expression in the US, and a member of the Facebook Oversight Board, warned Musk against indulging in a “fantasy” of dismantling moderation guidelines.

Elon Musk will learn the same lesson about self-governing social media as he has about self-driving vehicles, which is that they unavoidably crash. Musk is right that our current systems of content moderation are biased and flawed, but the idea that the rules can be swept away wholesale is fallacy,” Nossel said.

Musk is the world’s wealthiest person, according to Forbes, with a nearly $279bn fortune. He began building his wealth in 1999 when he sold Zip2, an online mapping and business directory, for $307m. He used his share to create what would become PayPal, sold to eBay for $1.5bn in 2002.

That same year, Musk founded Space Exploration Technologies, or SpaceX, after finding that cost constraints were limiting Nasas 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 success as the world’s most valuable automaker and largest seller of electric vehicles.

Some have questioned how Musk will divide his time and attention between all the companies he operates, though his track record of successful ventures is also seen as a positive for Twitter.

Shares of Twitter rose 5% on Monday to $51.50 per share after news of the sale.

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