Entrepreneur, Tesla and SpaceX CEO, and world’s richest man Elon Musk officially added a new title to his name: owner of Twitter Inc.
The board’s approval of the $44 billion deal came Monday after taking the week to deliberate on Musk’s offer.
The Tesla CEO confirmed $46.5 billion in financing from banks and other entities in a regulatory filing earlier this week.
In a filing with the Securities and Exchange Commission for his initial bid for the company, Musk stated, “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.”
The deal looked to be dead in the water last week when Twitter filed a shareholder rights plan or “poison pill” to prevent a hostile takeover by Musk. But, it never hurts to bet on the richest man in the world, and it looks as though bookies all over the world will be paying out in spades.
The First Move
The first whisperings of what would become the biggest social media shake-up of the year (so far) came April 4 when Musk used a (relatively) small portion of his enormous wealth to secure a 9.2% stake in Twitter. The stock purchase, worth $2.9 Billion, saw Musk become the social media company’s biggest outside shareholder.
After news of Musk’s purchase broke Monday through an SEC filing, shares of Twitter rose 26% in pre-market trading, adding $8 billion to its $31.5 billion market value.
Two days after on April 6, Musk joined the company’s board as a class II director, which gave him limited ability to affect change. The designation also thwarted his ability to own a more significant chunk of the social media giant.
“For so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions,” a Twitter filing with the SEC stated.
Social Media Shake-Up
There are myriad reasons Musk ultimately shunned the prestigious Twitter board and opted to buy the company outright.
Musk is a self-ascribed “free speech absolutist,” and he believes people’s first amendment rights were being hindered under the current regime:
Another deciding factor for the buyout was likely the concerning number of “bots” dictating discourse on the platform.
Between 9 percent and 15% of tweets come from fake accounts, according to new research by the University of Southern California and Indiana University – that amounts to 48 million bots on the site.
Musk even enthusiastically retweeted his own quoted material on the site Monday summing up his philosophy on the new direction for his latest acquisition:
The Future of Twitter
Will we see the reinstating of Donald Trump’s account? My personal prediction is a resounding “yes,” along with the reinstatement of other controversial figures – Milo Yianopolous immediately comes to mind. Will we see fewer ads? Most definitely. Will this massive restructuring increase Twitter’s user base? Time will tell, as Musk plans to take the company private during the tumultuous period of dynasty change. One thing is certain: the coming days, weeks, and months will not be boring for the massive social media platform.