Twitter accepts Elon Musk’s offer to buy platform

Caryl Anne Francia, Business Editor

After weeks of courting the social media platform with offers, Tesla Inc. CEO Elon Musk finally reached an agreement to purchase Twitter Inc.

It was made public on April 2 that Musk bought a 9% stake in the common stock, and the day closed with Twitter seeing its stock jump 27%. Owning 73,486,938 shares in the company, Musk became the company’s biggest shareholder. By the closing bell, he earned $784 million, and his stake was estimated to be worth $3.7 billion.

Twitter CEO Parag Agrawal announced on April 5 that Musk was joining the executive board, saying that his support for and criticism on the platform is needed to make it “stronger in the long-term.” Five days later, Musk retracted the position.

After investors in the company sued him for not disclosing his stake — per rules by the Securities and Exchange Commission, stakes worth more than 5% should be disclosed within 10 days of purchase — Musk offered to buy out the entire company for approximately $43 million.

Musk even said he would pay in physical cash, and stockholders would be given $54.20 in cash for each common stock they owned. Twitter countered the offer on April 15 by adopting a shareholders rights plan, weakening Musk’s influence and stake by selling new stock for shareholders to purchase at a cheap price.

Still, Twitter announced on April 25 that Musk would acquire the entire company for $44 million under those terms.

“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Bret Taylor, the chair of Twitter’s board of directors, said in a press release. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”

Musk will also acquire $25.5 billion in debt and marginal loan financing, providing back $21 billion in equity commitment. A press release reports that the transaction has no financing condition.

Concerns were raised regarding the internal structure of Twitter, such as whether Agrawal, who has only been in his position since November 30, will leave. However, he has expressed support for Musk’s deal so far, despite tensions with employees and concerns from users over freedom of speech.

“Twitter has a purpose and relevance that impacts the entire world,” Agrawal said in a press release. “Deeply proud of our teams and inspired by the work that has never been more important.”

Musk maintained that he would make improvements to the social media platform by adding new features, making open-sourcing the platform’s algorithm and removing spam bots.

“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” Musk said in the press release.

While this has been said, Musk’s plans for the platform seem to change every day, with him announcing in a May 3 tweet that he is considering charging users with commercial or governmental accounts. He sold $8.5 billion in Tesla stock at the end of April without disclosing why.

In addition to being the CEO of Tesla, Musk plays the same role for and is the founder of Space Exploration Technologies Corp., or “SpaceX,” his aerospace travel-focused company. Whatever change he brings to Twitter, Musk will do it as an experienced businessman.