The $44 billion deal marks the end of a dramatic courtship and a change of heart at Twitter, with many executives and board members initially opposing Mr Musk’s takeover approach. The deal has polarized Twitter employees, users and regulators about the power tech giants wield in setting the parameters of internet discourse and how those companies enforce their rules.
The two sides worked through the night to negotiate a deal in which Mr. Musk plans to take Twitter private in a deal that values the company at $54.20 a share.
The acquisition, if it goes through, would mark one of the largest acquisitions of a tech company and likely affect the direction of social media. Mr. Musk will champion a more hands-off approach to voice moderation at a company that has struggled to reconcile freewheeling conversations with content that appeals to advertisers.
Monday, a day after The Wall Street Journal first reported a deal was close, Mr. Musk tweeted out that he wants the platform to become a destination for wide-ranging discussion and disagreement.
“I hope even my worst critics stay on Twitter because that’s what free speech means,” He wrote†
Mr. Musk said after the deal was announced that he wants to make Twitter a better user experience, including by adding new features and fighting spam. The billionaire, who is also CEO of Tesla Inc.
and Space Exploration Technologies Corp., has a record of challenging conventions across a variety of industries.
Twitter faces major business challenges and has already started a sea change after a battle with activist investor Elliott Management Corp. about two years ago. Twitter said just over a year ago that it wanted to double its revenue to $7.5 billion by the end of 2023, reaching at least 315 million supposedly monetizing daily active users by then.
To achieve that latter goal, the company would need to sharply increase its user growth, which has been in the single-digit percentage points for the past few years.
One of the other issues Musk will face is whether he will allow Donald Trump back on Twitter after the Republican former president’s personal account was “permanently suspended” by the company last year in the wake of the 6th attack. January 2021 at the US Capitol by a mob of his supporters seeking to interfere with the certification of President Biden’s 2020 election victory.
Mr. Trump told Fox News on Monday that he had no intention of returning to Twitter and would instead use his startup Truth Social as his social media network of choice.
At an employee meeting on Monday afternoon, CEO Parag Agrawal said no layoffs are planned and the company’s priorities will not change before the deal closes, according to a person who heard the comments. Mr Agrawal said that once Mr Musk takes over, “we don’t know which way the company will go,” the person said.
Mr Agrawal said Mr Musk agreed to convert employee shares into cash once the deal is closed and pay them out according to the existing waiting schedule, the person said.
Bret Taylor, Twitter’s independent chairman, said the deal reflects the best outcome for shareholders.
The San Francisco-based social media company was expected to decline the offer, which Mr. Musk made on April 14, without saying how he would pay for it. A day after the unsolicited offer, Twitter passed a so-called poison pill, intended to make it more difficult for Mr. Musk to acquire a more than 15% stake in the company.
Twitter changed its stance after Mr. Musk detailed details of his financing plan for the acquisition. On April 21, he said he had drawn up $46.5 billion in funding. Twitter shares rose sharply and business leaders opened the door to negotiations.
Twitter shares rose 5.7% Monday, closing at $51.70 each. The stock has performed anemic in an era of massive returns for tech companies. The shares jumped on their first trading day in 2013, closing at $44.90, within a dollar of where they were more than eight years later when Mr. Musk took his approach.
But since Mr. Musk announced a roughly 9% stake in the company in early April, Twitter shares are up 32%. That has pushed Twitter higher year-on-year, outperforming other tech companies and the broader market.
The turnaround on Twitter comes after Mr. Musk held a private meeting with several company shareholders on Friday to praise the virtues of his proposal, while reiterating that the board of directors must make a “yes-or-no” decision, they said. people familiar with the discussions .
Mr. Musk, who has more than 82 million Twitter followers, has long used the platform to voice his opinion on everything from space travel to cryptocurrencies. In January, he started buying Twitter stock and in April he became the largest individual investor with a stake of more than 9%.
He has previously used Twitter to escalate a conflict with the Securities and Exchange Commission after the agency opened an investigation into some of his recent stock sales, and he often blows his critics out on the social network.
By keeping Twitter private, Mr. Musk could make changes without the control public companies typically get from their shareholders. He has also said that he wants to retain as many shareholders as possible.
In early April, Twitter invited Mr. Musk to join its board of directors, which would have prevented him from owning more than 14.9% of the company’s stock. Mr. Musk initially agreed and rejected the offer.
Musk’s proposed changes to the platform include softening his stance on content moderation, creating an editor for tweets, making Twitter’s algorithm open source — allowing people outside the company to view it and suggest changes — and be less dependent on advertisements, among other ideas.
Mr. Musk, a self-proclaimed “free speech absolutist,” said in a recent interview at a TED conference that he sees Twitter as the “de facto town square.”
Twitter should be more cautious when it decides to delete tweets or permanently ban user accounts, Musk said, pointing to temporary suspensions as a better solution.
Mr Musk said he also wants the platform to be more transparent when it takes action that increases or decreases the reach of a tweet. He said he wasn’t sure how some of those ideas would be implemented.
Twitter has for years advocated what it calls healthier discourse on its platform and adding content moderation, at least in part arguing it’s good for business.
The company has also introduced new features that have gained some traction with users, including Twitter Spaces, which allows people to host live audio conversations with each other within the platform.
Mr. Musk has said he wants Twitter to be less reliant on ads — which accounted for about 90% of its revenue in 2021 — and shift its business model more towards subscriptions. The platform currently offers a subscription-based service called Twitter Blue, which offers customers premium features such as “undo tweet” for $2.99 per month. He suggested removing all ads on Twitter as part of the subscription offer.
Mr. Musk also put forward the idea of cutting staff, closing the company’s San Francisco headquarters and not giving the board of directors a salary. The latter alone could save about $3 million a year, he said.
His other proposed changes to Twitter include trying to stop spam and scam bots and allowing longer tweets. The current limit is 280 characters.
On Thursday, Twitter will announce its first quarter results. The company said Monday it no longer plans to hold a meeting with analysts that day.
—Dana Cimilluca and Liz Hoffman contributed to this article.
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