SAN FRANCISCO — Elon Musk acquired Twitter for $44 billion on Monday, the company announced, giving the world’s richest person command of a highly influential social media site that serves as a platform for political leaders, a sounding board for experts across industries and an information hub for millions of everyday users.
The acquisition followed weeks of evangelizing on the necessity of “free speech,” as the Tesla CEO seized on Twitter’s role as the “de facto town square” and took umbrage with content moderation efforts he views as an escalation toward censorship. He said he sees Twitter as essential to the functioning of democracy and said the economics are not a concern.
Ownership of Twitter gives Musk power over hugely consequential societal and political issues, perhaps most significantly the ban on former president Donald Trump that the site enacted in response to the Jan. 6, 2021, Capitol riot.
Under the terms of the deal, Twitter will become a private company and shareholders will receive $54.20 per share, the company said in a news release. The deal is expected to close this year.
“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 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,” he added.
Musk‘s Twitter deal further expands his portfolio beyond rocket company SpaceX, which has aspirations of landing on Mars, and carmaker Tesla, which pushed electric vehicles into the mainstream.
“He’s more powerful than countries now,” said Ross Gerber, a Tesla investor close to Musk who said he had bought Twitter shares last week in hopes the deal went through. “He has the most important technology asset in America … probably one of the most strategic military assets in the world … and now he has one of the most important communications tools in the world.”
Musk is very active on the platform, having tweeted more than 17,300 times. He averages 125,180 likes per tweet, according to Socialtracker. Musk has earned praise for his wide-ranging approach to the site: He toggles freely between crude memes targeting his rivals, polls on the state of free speech and critical business decisions.
His tweets have gotten him into trouble with the Securities and Exchange Commission. In 2018, he wrote that he had “Funding secured” to take Tesla private at $420 a share.
He said he chose $420 “because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend would find it funny, which admittedly is not a great reason to pick a price,” according to the federal complaint.
The deal could raise new regulatory issues for Musk, too.
Because of the deal’s size, Musk will be required under federal law to report his purchase of Twitter to the Federal Trade Commission and the Justice Department. Multiple legal experts said the deal does not present clear antitrust concerns because Twitter is not being purchased by a social media competitor. But given Democrats’ focus on concentration of power, especially in the tech sector, it’s possible that government regulators could open a review of the deal and slow it down.
“If you’re sitting in the agencies, you’re aware of that atmosphere,” said William E. Kovacic, a former Republican chair of the FTC.
Regulators could raise objections to Musk potentially collateralizing the purchase with Tesla stock, according to former SEC lawyer Tyler Gellasch, who now runs Healthy Markets, a nonprofit organization advocating market reforms.
“This is buying a lot of one company by borrowing against billions of dollars in shares of another company, and that very concentrated collateral carries risks,” Gellasch said. “If it leads the banks to say they’re going to need more and different collateral, that wouldn’t block Musk’s purchase per se, but it could make the logistics of the deal dicier.”
AUTHOR: Douglas MacMillan, Faiz Siddiqui, Rachel Lerman and Taylor Telford
DATE PUBLISHED: April 25, 2022