Tesla CEO Elon Musk finally acquired Twitter following a week-long escapade that saw the two entities in a stalemate on Musk's initial buyout offer. The company will exchange hands at a $54.20 share in cash transaction that will be estimated at around $44 billion, upon which it will become a privately held company led by the Tesla CEO.
Twitter's Buyout
Twitter's buyout is estimated to be in the ballpark of a 38% premium of Apr. 1st closing stock price, according to the official press release. That date marks "the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter." Current stockholders will be awarded the aforementioned $54.20 a share in cash under the new agreement.
Sitting CEO of Twitter, Parag Agrawal, highlighted the importance of Twitter as a driver that "impacts the entire world." He gave no official words on the buyout itself, only optimism pertaining to the employees and staff, calling their work both inspirational and "more important" than ever before.
As to the randomness of the finale between Musk and Twitter, the social media site's own independent board chair, Bret Taylor, relayed that the board eventually decided that the amount offered by Musk was concluded as enough for the board to accept. He explains that upon "a deliberate focus on value, certainty, and financing," Twitter's board inevitably accepted the terms as it allowed "a substantial cash premium" and was essentially "the best path forward for Twitter's stockholders."
Related Article: Elon Musk finally buys Twitter: How much did the app cost?
Musk made aware of his coffers to the SEC come Thursday, evidenced via an SEC filing that concludes $21 billion was utilized of the billionaire's own personal equity while the additional $25.5 billion was loaned. News of the potential buyout in the early morning of Apr. 25th saw Twitter stock leap to ever-increasing bounds by about a 2% increase. The Tesla executive was busy over the course of the weekend, taking aim at Microsoft's head Bill Gates for shorting Tesla.
"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 expressed amid the press release. "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 'could cost' Musk an Annualized $1 Billion in Service Fees
According to various analysts, Twitter upkeep alone could cost the executive an annualized $1 billion in service fees. How exactly Musk plans to express these myriad alterations still remains rather unclear, but the executive did add that he is excited to work alongside both "the company and the community of users to unlock it."
The unanimously approved transaction via the board will be subject to some scrutiny, but is planned to close sometime in 2022, still subject by approval of Twitter stockholders and assorted regulatory approvals. Some saw the lining on the wall, as Q1 2022 results were estimated to be rather poor, thus Twitter stockholders sought the buyout as opposed to continuing its poison pill enacted on Apr. 15th.
The rollercoaster ride of events has finally met its conclusion, but it may well be far from over. While Musk's $44 billion offer has been accepted and awaits regulatory oversight, questions still remain on just how exactly the executive will attempt to rework the social media site and what it ultimately means for vid users.
Some worry that Musk will make Twitter a paid subscription service, while others fear his free speech mania will only cause the site to flourish in all the wrong ways. Add to those current woes headed by Twitter employees, which are brought to the forefront of the situation via The New York Times as staff grips with the volatile evolution of the company.
This article is owned by Tech Times
Written by Ryan Epps
