Tech billionaire Elon Musk has just succeeded in acquiring Twitter for $44 billion cash on Monday. The board of the company and its shareholders agreed to sell the company at Musk’s buyout offer when it became apparent that he was the only suitor with the best offer on the ground.
The 16-year-old social media platform with more than 500 million users – including top world leaders and prominent social influencers – is now the private property of a single individual. The acquisition however comes with a number of teething problems that may or may not go away soon.
Given Musk’s authoritarian style of leadership at his other companies, most Twitter employees have begun to consider exiting the company in the possible case that the billionaire acquires it. The fact that Musk publicized his plans to take the company private to promote free speech and institute a number of other changes has also gotten analysts worried.
While announcing that he cares little about monetizing the company, Musk said he might cancel advertisements on the platform and modify the algorithms for making tweets viral.
“I don’t care about the economics at all,” he said. “Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. 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.”
After Twitter’s board of directors agreed to sell the platform at Musk’s proposed $52.20 per share on Monday, the company’s share price jumped by 5.7% to close at $51.70. Although the shares sold at about $70 before CEO Agrawal came on board in December 2021, the recent price surge represented almost 40% premium since Musk first announced that he purchased a 9% stake in Twitter.
The leader of Boyar Value Group which invested in Twitter, Jonathan Boyar, said the social media could do better if given more time to evolve.
“I think if the company was given enough time to transform, we would have made substantially more than what Musk is currently offering,” said Boyar. “If the public markets do not properly value a company, an acquirer eventually will.”
Although skeptics did not initially believe Musk could cough up his proposed $43 billion acquisition offer despite having a net worth of $268 billion according to Forbes, they began to take him seriously when he released details that he had secured $25.5 billion in debt and margin loan financing and would be adding $21 billion equity himself.
Before his initial investment and subsequent takeover, Musk had 84 million followers on Twitter.