Twitter has agreed to accept a $44 billion (£34.53 billion) takeover bid from Elon Musk, the richest person in the world, in a move that has prompted one big question – what does he plan to do with it?
In just a few weeks, Musk, 50, has gone from popular Twitter contributor to the company’s largest individual shareholder to a would-be owner of the social platform — a whirlwind of activity that could change the service dramatically given Musk’s self-identification as a “free speech absolutist”.
“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 on Monday.
Who is Elon Musk?
Musk has an estimated $273.6 billion (£209.21 billion) fortune that makes him the wealthiest person in the world, worth $92.3 billion (£70.58 billion) more than runner-up Jeff Bezos. Musk was born in Pretoria, South Africa, to a Canadian mother and South African father and later attended the University of Pennsylvania, where he graduated in 1997.
With a stable of businesses ranging from electric cars to private rocket ships, Musk did not found Tesla, which he has led from 2008. But his insight that the firm’s electric cars should be high-performance machines with sophisticated, smartphone-style software revolutionised the global auto business, prompting established companies to try to catch up while spurring new, all-electric competitors. Wall Street values Tesla at more than $1 trillion – more than all three Detroit car makers, plus Toyota Motor Corp, combined.
At the same time, his company SpaceX, has upended the space launch industry by developing rockets capable of putting satellites into space and returning to Earth for re-use.
Perhaps more than any other person, Musk has helped bring bitcoin and other cryptocurrencies into the mainstream, with Tesla holding about $2 billion in bitcoin on its balance sheet and the company among the few to accept dogecoin as payment.
Musk and Twitter
Twitter helped Musk become a household name. He has 81 million followers and built a pop culture following large enough to help him earn a spot hosting the venerable US comedy TV show Saturday Night Live in 2021.
Musk has used Twitter to go after investors, and he posts on everything from Dad jokes to polls on what he should do with his gains from Tesla’s surging stock price.
While Twitter’s user base remains much smaller than those of rivals such as Facebook and TikTok, the service is popular with celebrities, world leaders, journalists and intellectuals. Musk’s followers rival pop stars such as Ariana Grande and Lady Gaga.
Musk also has a history of his own tweets causing legal problems. He has previously run into problems with US regulators at the Securities and Exchange Commission (SEC) over his own tweets, having been accused of breaching trading rules when tweeting about his business interests.
Musk has also been accused of tweeting misinformation about Covid-19 after posting in March 2020 that children were “essentially immune” to the disease.
What’s been going on?
Musk began buying Twitter stock in earnest only a few months ago.
Earlier this month, it was announced he had bought a 9% stake and would join the board, only for Twitter chief executive Parag Agrawal to confirm that Musk had changed his mind just days later.
The billionaire entrepreneur then offered to buy the company outright.
In his offer letter to Bret Taylor, chairman of the Twitter board, Musk said he had invested in the social media platform “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”, but added “since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form”.
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
Under pressure, Twitter started negotiating with Musk to buy the company. On Monday it was confirmed the offer had been accepted.
The deal is expected to close sometime this year. But before that, shareholders still have to weigh in, as well as regulators in the US and in countries where Twitter does business, before the deal is completed.
How could Twitter look?
Before Musk’s takeover, Twitter had no one singular owner – it was co-founded by Jack Dorsey in 2006, and it became a publicly traded company in 2013.
The billionaire entrepreneur then became the highest shareholder earlier in April, with Dorsey’s backing. The co-founder tweeted that although he does not believe “anyone should own or run Twitter”, “Elon is the singular solution I trust” for the platform to be a “public good at a protocol level”.
Dorsey added: “Elon’s goal of creating a platform that is ‘maximally trusted and broadly inclusive’ is the right one.”
Much of Musk’s vocal criticism of Twitter over recent weeks has centred around his belief that it falls short on free speech principles. The social media platform has angered followers of Donald Trump and other far-right political figures who’ve had their accounts suspended for violating its content standards on violence, hate or harmful misinformation.
In recent weeks, he has voiced a number of proposed changes for the company, from relaxing its content restrictions – such as the rules that suspended Trump’s account – to ridding the platform of fake and automated accounts, and shifting away from its advertising-based revenue model. Musk believes he can increase revenue through subscriptions that give paying customers a better experience, perhaps even an ad-free version of Twitter.
As Twitter’s main customers, advertisers have also been a voice in pushing for stronger content rules that Musk has criticised. Asked during a recent TED talk if there are any limits to his notion of “free speech”, Musk said Twitter or any forum is “obviously bound by the laws of the country that it operates in. So obviously there are some limitations on free speech in the US, and, of course, Twitter would have to abide by those rules.”
Beyond that, though, he said he’d be “very reluctant” to delete things and in general be cautious about permanently banning users who violate the company’s rules.
It won’t be perfect, Musk added, “but I think we want it to really have the perception and reality that speech is as free as reasonably possible”.
Story was updated throughout after Musk’s offer was accepted.