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Elon Musk buys Twitter

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You don't even need 280 characters to deliver this momentous news: Elon Musk just bought Twitter.

The Tesla CEO and SpaceX founder has been circling the popular social media platform for weeks, using Twitter itself as a medium to announce both his intentions and ongoing frustrations with the platform in its current form.

Now, after lining up the funds (his own and hefty support from Morgan Stanley) Musk will pay $43.4 billion -- roughly $54.20 per share -- in a tender offer that gives him control of the company. The deal now faces regulatory approval.

With Twitter's earnings report just days away, it's likely the new owner will show up during the company's Q1 earnings call - at least just to say "hi," and demurely refuses to answer most analysts' questions directly.

In a release on the acquisition, Musk said, "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.

"I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it."

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Bret Taylor, Twitter's Independent Board Chair noted in the release that "The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders."

Parag Agrawal, Twitter's CEO and the person who may end up working most closely with Musk said in the release, "Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important." He notably did not reference Musk directly.

Musk's triumph comes after a circuitous path to ownership: First he bought almost 10% of Twitter shares, giving him a seat at the table and inviting him to the board. Musk accepted and then just as quickly backed out. But he wasn't finished. Soon, he was offering $43 billion for the company, which prompted Twitter's board to adopt a poison-pill plan that would have sold cheaper shares to shareholders had Musk sought to purchase more than 15% of the company's shares.

Soon after, Musk, who has been on the platform since 2009, returned to a tender offer, which meant he'd need to pull together all the money to buy the company. As of last week, Musk secured the funds, and over the weekend, Musk and Twitter's executive team met in person to hammer out the details.

A bumpy road

Not everyone is thrilled at the prospect of a Musk-owned Twitter. In the run-up to the announcement, #RIPTwitter was trending on the platform.

As for what comes next, Musk has made clear his intentions to ensure that Twitter supports free speech from all sides (the implication being that it currently does not, though there is no empirical evidence to support this).

He may revisit some user bans, including that of former President Trump.

He'll likely open-source Twitter's code.

A fan of blockchain and NFTs, Musk might push the platform more aggressively into the crypto space.

But investors and backers will be most interested in Musk's growth plan. Twitter has done a decent job of generating more revenue from existing users, but its growth has in recent years been relatively slow and flat. It's not clear that Twitter could ever have the broad-based, global appeal of, say Facebook (which has its own growth struggles) or TikTok.

It's unclear what Musk can do to reenergize some of Twitter's biggest celebrity accounts.

Musk will probably fast-track the already-under-development Tweet Edits feature, since he made it clear during the acquisition effort that he's a fan.

What will Elon do?

What happens next depends on Elon Musk, or rather the Elon Musk who shows up to run Twitter. Will it be the brilliant, sure hand that, through SpaceX, regularly ferries astronauts and supplies to the International Space Station? The man who basically created the EV market with Tesla? 

Maybe.

It might also be the man who impulsively tweets his inner ID and EGO. Who jokes that "The next Twitter board meet's gonna be lit," with a picture of him smoking a joint on Joe Rogan's podcast.

There sometimes seems to be little middle ground for Musk, who is both extremely successful and rich and extremely impulsive and emotional.

The fear that Musk will let the worst element back on Twitter -- Nazis, trolls, anti-vaxxers, Donald Trump, and so on -- is real. A free-speech absolutist might demand ALL voices be heard, even the dangerous ones.

Still, Musk doesn't truly know the inner workings of Twitter's extensive (and still flawed) content moderation system. He soon will. That may inspire some different and more rational thinking about how to excite and energize Twitter for the future while protecting the most vulnerable who still use it every day.

Date

25 Apr 2022

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