Twitter Accepts Elon Musk’s $44 Billion Offer

Twitter announced that it has accepted Elon Musk’s proposal to buy the social media company for roughly $44 billion and take it private, sending its shares up 5.64% on the news. We'll give you a brief overview in detail of the news here. 👇🏻

What's the news about?

Tesla CEO Musk will pay $54.20 per share in cash to buy Twitter and plans to take the social media giant private after the deal is completed, subject to shareholder and regulatory approval. Twitter stock closed at $51.70 on Monday, close to the $54.20 price that Musk agreed to pay.

The agreement puts an end to a dramatic series of events just weeks after Musk disclosed a large stake in Twitter. Not long afterward, the social media company said Musk has agreed to join its board of directors, but the Tesla CEO made an unexpected U-turn and instead of joining the board he offered to buy the company at $54.20 per share, valuing it at approximately $43 billion.

Musk is the most followed CEO on Twitter with over 84 million followers. He has been quite active on Twitter but is also known as a loud critic of the platform, slamming it for multiple reasons including its free speech principles.

“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 upon announcing the deal.

He added he wants to improve Twitter and make it “better than ever” by adding “new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans.”

While Musk claims he wants to make Twitter a free speech town square, his critics still doubt his intentions and are concerned that he may use the platform to silence those who do not share his thoughts, based on the fact that he blocked several critics from his personal account in the past.

The decision Twitter's board made

At first, Twitter was expected to reject Musk’s takeover bid after the company adopted a “poison pill” to prevent him or any other investor from increasing their stakes beyond 15%. Also, Twitter initially saw Musk’s offer as too low and was concerned about how would he finance the deal as the majority of his wealth belongs in Tesla shares.

But the social media company had a change of heart once Musk disclosed capital commitments of $46.5 billion in a filing with the Securities and Exchange Commission (SEC) to fund the acquisition - $25.5 billion in debt financing from Morgan Stanley and other banks and about $21 billion in equity financing.

The fact that Musk secured financing in a quick manner, as well as the fact that there were no other serious suitors, pushed the Twitter board to accept Musk’s offer.

How did the market react?

Following Monday's news, Twitter's stock surged, however, it's downright after the acquisition.

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