27th September 2023

The $44 billion deal marks the shut of a dramatic courtship and a change of coronary heart at Twitter, the place many executives and board members initially opposed Mr. Musk’s takeover strategy. The deal has polarized Twitter workers, customers and regulators over the ability tech giants wield in figuring out the parameters of discourse on the web and the way these firms implement their guidelines.

The 2 sides labored by way of the evening to hash out a deal by which Mr. Musk plans to take Twitter personal in a deal that values the corporate at $54.20 a share.

Elon Musk struck a deal on Monday to purchase Twitter for about $44 billion, transferring the world’s richest man a step nearer to taking management of the social-media platform. Photograph: Ryan Lash/TED/AFP/Getty Photos

The takeover, if it goes by way of, would mark one of many greatest acquisitions of a tech firm and can possible have an effect on the course of social media. Mr. Musk will convey a dedication to a extra hands-off strategy on speech moderation to an organization that has struggled to reconcile freewheeling conversations with content material that appeals to advertisers.

On Monday, a day after The Wall Road Journal first reported {that a} deal was shut, Mr. Musk tweeted to point that he desires the platform to be a vacation spot for wide-ranging discourse and disagreement.

“I hope that even my worst critics stay on Twitter, as a result of that’s what free speech means,” he wrote.

Mr. Musk mentioned after the deal was introduced that he desires to make Twitter a greater person expertise, partly by including new options and preventing spam. The billionaire, who can also be chief govt of Tesla Inc. and Area Exploration Applied sciences Corp., has a document of difficult conventions in disparate industries.

Twitter is going through vital enterprise challenges and has already launched into a turnaround plan after a combat with activist investor Elliott Administration Corp. about two years in the past. Twitter mentioned just a little over a 12 months in the past that it aimed to no less than double its income to $7.5 billion by the top of 2023 and attain no less than 315 million so-called monetizable every day lively customers at the moment.

To achieve that latter objective, the corporate would want to sharply improve its person development, which has been within the single-digit proportion factors for many of the previous few years.

Among the many different points Mr. Musk will face is whether or not to permit Donald Trump again on Twitter, after the Republican former president’s private account was “completely suspended” by the corporate final 12 months within the wake of the Jan. 6, 2021, assault on the U.S. Capitol by a mob of his supporters looking for to intervene with the certification of President Biden’s 2020 election win.

Mr. Trump advised Fox Information on Monday that he had no plans to return to Twitter and would as an alternative use his startup Reality Social as his most well-liked social-media community.

At an all-hands worker assembly on Monday afternoon, CEO Parag Agrawal mentioned that there are not any layoffs deliberate and that the corporate’s priorities aren’t altering earlier than the deal closes, in accordance with an individual who heard the remarks. Mr. Agrawal mentioned that when Mr. Musk takes over, “we don’t know what course the corporate might go,” the particular person mentioned.

Mr. Agrawal mentioned Mr. Musk agreed to transform worker stockholdings to money as soon as the deal closes and pay them out on the prevailing vesting schedule, the particular person mentioned.

Bret Taylor, Twitter’s unbiased board chairman, mentioned the deal displays one of the best consequence for shareholders.

The San Francisco-based social-media firm had been anticipated to rebuff the provide, which Mr. Musk made April 14 with out saying how he would pay for it. A day after the unsolicited provide, Twitter adopted a so-called poison tablet, designed to make it tougher for Mr. Musk to achieve greater than a 15% stake within the firm.

Twitter modified its posture after Mr. Musk detailed components of his financing plan for the takeover. On April 21, he mentioned he had $46.5 billion in funding lined up. Twitter shares rose sharply, and firm executives opened the door to negotiations.

Twitter shares rose 5.7% Monday to shut at $51.70 every. The inventory has been an anemic performer in an period of giant returns for know-how firms. Its shares jumped on their first day of buying and selling in 2013 to shut at $44.90, inside a greenback of the place they have been greater than eight years later when Mr. Musk made his strategy.

However since Mr. Musk disclosed a roughly 9% stake within the firm in early April, Twitter shares have climbed 32%. That has pushed Twitter larger on a year-to-date foundation, outpacing different know-how firms and the broader market.

The turnabout on Twitter’s half comes after Mr. Musk met privately Friday with a number of shareholders of the corporate to extol the virtues of his proposal whereas repeating that the board has a “yes-or-no” choice to make, individuals aware of the discussions mentioned.

Mr. Musk, with over 82 million Twitter followers, has lengthy used the platform to pronounce his views on every part from house journey to cryptocurrencies. In January, he started shopping for Twitter inventory, turning into the single-largest particular person investor with a greater than 9% stake by April.

He has beforehand used Twitter to escalate a battle with the Securities and Change Fee after the company opened a probe into a few of his latest inventory gross sales, and he usually blasts his critics on the social community.

Taking Twitter personal would enable Mr. Musk to make modifications with out the scrutiny public firms usually are below from their shareholders. He additionally has mentioned he desires to retain as many shareholders as potential.

Twitter, in the beginning of April, invited Mr. Musk to hitch its board—which might have prevented him from proudly owning greater than 14.9% of the corporate’s inventory. Mr. Musk initially agreed after which rejected the provide.

Mr. Musk’s proposed modifications for the platform embrace softening its stance on content material moderation, creating an edit characteristic for tweets, making Twitter’s algorithm open supply—which might enable individuals outdoors the corporate to view it and recommend modifications—and relying much less on promoting, amongst different concepts.

Mr. Musk, a self-described “free speech absolutist,” mentioned in a latest interview at a TED convention that he sees Twitter because the “de facto city sq..”

Twitter needs to be extra cautious when deciding to take down tweets or completely ban customers’ accounts, Mr. Musk mentioned, pointing to momentary suspensions as a greater answer.

Mr. Musk mentioned he additionally desires the platform to be extra clear when it takes motion that amplifies or reduces a tweet’s attain. He mentioned he wasn’t sure how a few of these concepts can be applied.

Twitter headquarters in San Francisco. There may be wariness amongst workers concerning the proposed takeover.

Photograph: David Paul Morris/Bloomberg Information

Twitter has spent years advocating for what it calls more healthy discourse on its platform and including content material moderation, arguing no less than partly that it’s good for enterprise.

The corporate additionally launched new options which have been gaining some traction with customers, together with Twitter Areas, which permits individuals to host stay audio conversations with each other throughout the platform.

Mr. Musk has mentioned he desires Twitter to rely much less on promoting—which supplied about 90% of its income in 2021—and shift its enterprise mannequin extra towards subscriptions. The platform at the moment affords a subscription-based service known as Twitter Blue, which supplies prospects premium options like “undo tweet” for $2.99 a month. He recommended eradicating all adverts on Twitter as a part of the subscription choices.

Mr. Musk additionally floated the thought of reducing workers, shuttering the corporate’s San Francisco headquarters constructing and never giving the board of administrators a wage. The latter may save about $three million a 12 months alone, he mentioned.

His different proposed modifications for Twitter embrace attempting to cease spam and rip-off bots and permitting for longer tweets. The present restrict is 280 characters.

On Thursday, Twitter is scheduled to announce its first-quarter earnings. The corporate mentioned Monday it now not deliberate to carry a name with analysts that day.

Elon Musk and Twitter

Write to Cara Lombardo at cara.lombardo@wsj.com, Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com and Georgia Wells at georgia.wells+1@wsj.com

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