Elon Musk has offered to buy Twitter – will it happen?
Have you browsed Twitter lately? If yes, you’ve probably noticed that debate on the platform is generally anything but civil. Still, Twitter is a de facto town square, allowing politicians, news organizations, and the masses to push their opinions and messages.
However, Twitter has increasingly cracked down on messaging from the political right. This crackdown became painfully evident in January 2021 when Twitter banned then sitting president Donald Trump. While Twitter claimed the ban was there to stop the further risk of incitement, critics were quick to point out that no such ban was placed on Taliban accounts, leaving many questioning the political bias.
Luckily for free speech absolutists, billionaire Elon Musk watched the censoring play out on Twitter. And, after Twitter banned satire site The Babylon Bee, Musk decided he’d had enough. Here’s everything you need to know about Musk’s plans for Twitter.
Putting His Money Where His Mouth Is
Musk is the richest man in the world, is a prolific Twitter user, and isn’t afraid of controversy. For example, in 2018, Musk posted that he’d secured funding to take Tesla private at $420 a share, which led to a fair amount of trouble with the Securities and Exchange Commission (SEC).
Then, in November 2021, Musk tweeted out a poll asking his followers if he should sell 10 percent of his stock in Tesla and stated that he’d “abide by the results of this poll.” When the poll confirmed he should sell a percentage of his Tesla shares, Musk followed through with his promise and sold approximately $5 billion worth of Tesla shares. And in December 2021, Musk called Senator Elizabeth Warren “Senator Karen” when Warren said Musk didn’t pay enough in taxes.
Additionally, Musk has been increasingly vocal about his concern over censorship on Twitter over the past year. All of this came to a head when Musk, who only follows 116 accounts on Twitter, one of which is The Babylon Bee, heard that Twitter banned the Bee for jokingly selecting Rachel Levine — a transgender female — as their “Man of the Year.”
In response to the ban, in March 2022, Musk tweeted out a poll asking if people believed Twitter “rigorously adheres to [the free speech] principle?” Musk emphasized that the consequences of the poll would be significant. The poll received 2,035,924 votes, with 70.4 percent of respondents voting “No,” Twitter doesn’t protect free speech.
Like with his above poll, the results of the free speech poll spurred Musk to action, and he purchased 9.2 percent of Twitter’s stock on April 4. At the time, this made Musk Twitter’s largest shareholder and prompted many to speculate on Musk’s plans for the platform.
Following the purchase, Twitter’s CEO, Parag Agrawal, offered Musk a seat on Twitter’s board, but it was contingent on Musk not purchasing more than 14.9 percent of the company’s common stock.
Transformation of Twitter
Never one to hide his agenda, after the purchase and board position offering, Musk stated that he wanted to return Twitter to a free speech platform and make it more transparent. However, this didn’t sit well with the Twitter board, and a few days later, Musk rejected the board position leaving the door open to a hostile takeover of Twitter.
After rejecting the board position, Musk stated that Twitter needed to be “transformed as a private company” and could “neither thrive nor serve” free speech as a public company. To that end, Musk put in an official offer to buy Twitter for $54.20 a share, or about $44 billion.
Following Musk’s official offer to buy Twitter and return it to a free speech platform, the mainstream media panned the buy as an attack on democracy and decent society. And, for a few days, it looked like Twitter would refuse Musk’s offer.
But, in a twist at the last minute, Twitter accepted Musk’s offer on April 25.
Will It Go Through?
As of this writing, Musk’s purchase of Twitter is proceeding and is expected to close sometime in the next six months. But, that’s not a guarantee that the acquisition will happen.
Indeed, while Musk has received commitments for $46.5 billion to finance the deal, Twitter’s stock is currently trading below the $54.20 offer. That means there’s doubt on the Market that the purchase will go through.
Conversely, Musk, who owns a more than 20 percent stake in Tesla, is using his Tesla shares as collateral to purchase Twitter. If Twitter’s stock falls dramatically after Musk’s purchase, that could force Musk to sell part of his stake in Tesla. Consequently, Musk’s purchase of Twitter could negatively impact Tesla by opening it up to risk. Indeed, that fear seems to be having an impact on Tesla, and Tesla’s stock is down, trading at approximately $749 a share as of this writing — a sign from the Market that the Twitter deal will go through.
In other words, the market is signaling the Twitter deal will, and won’t, go through, so right now it’s too soon to tell if Musk will complete the purchase. Still, if Musk follows through with his plan to purchase Twitter, one thing is sure: Twitter will have a new sheriff in town, and that sheriff is a self-described free speech absolutist.
