By Terrance Turner
April 25, 2022
BREAKING NEWS: Billionaire businessman and Tesla founder Elon Musk just bought Twitter.
The social networking site has agreed to sell itself to Mr. Musk for $54.20 a share, a 38 percent premium over Twitter’s closing stock price on April 1, according to the New York Times. Musk is buying the site for a total of nearly $44 billion. When the transaction is complete, Twitter will become a privately held company.
“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,” said Mr. Musk in a statement. “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.”
This caps a weeks-long saga: Musk purchased 9.4% of Twitter shares on April 4, making him the site’s largest individual shareholder. The next day, Twitter announced that it was appointing Musk to its board of directors, according to CNN. But by April 10, the deal fell apart: Musk decided not to come on board.
Twitter CEO Parag Agrawal announced the news in a tweet, writing in part: Elon Musk has decided not to join our board.” Speculation arose as to whether a background check was at the heart of Musk’s decision to pull back, but Agrawal made no mention of that in his statement.
“The board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward. The board offered him a seat,” the statement said.
“We announced on Tuesday that Elon would be appointed to the board contingent on a background check and formal acceptance. Elon’s appointment to the board became officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders, whether they are on our board or not. Elon is our biggest shareholder and we will remain open to his input.”
On April 14, Musk abruptly changed course, announcing plans to buy the company and take it private. Investors wondered if he had enough money for the idea. Twitter adopted a “poison pill” strategy, a mechanism that’s meant to make it less palatable to buy the company. (If Musk bought more than 15% of the site, Twitter woud flood the market with stock, thus diluting the value of the shares.)
Musk responded to questions about his financing with a new proposal last week. In it, he detailed his funding, including $13 billion from Morgan Stanley and other lenders, $12.5 billion in loans against his own Tesla stock, and $21 billion in equity, per Bloomberg BusinessWeek. This financial revelation forced Twitter’s board to seriously reconsider the deal.
“In connection with the Offer and the Merger, the Equity Investor [Musk] is pleased to offer this commitment to, directly or indirectly, contribute to or otherwise provide cash to, Parent or the Purchaser at or immediately prior to the closing of the Offer (the “Closing”) the Aggregate Equity Commitment (as defined below), or such lesser amount as is necessary to fully discharge, when taken together with any other funds available to Parent or the Purchaser, the amounts required,” his SEC filing stated.
This marked a turning point. The Twitter board met on Sunday to discuss Musk’s offer, per CNN. The Wall Street Journal first broke the story, which prompted belief that the two sides were negotiating a deal.
In a statement, Bret Taylor, Twitter’s chairman, said the board had “conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.” ((Shares of the company rose 5.7% Monday to close at $51.70, their highest closing value in about five months.)
“Twitter has a purpose and relevance that impacts the entire world,” Agrawa said today. “Deeply proud of our teams and inspired by the work that has never been more important.”
What that work looks like is unclear, as are the changes that Musk will make. The Times said today: “Mr. Musk has frequently expressed concern that Twitter’s content moderators go too far and intervene too much on the platform, which he sees as the internet’s “de facto town square.” Musk describes himself as a “free speech absolutist,” prompting questions about how he will handle things like hate speech and COVID disinformation. There are also questions today about whether he will welcome back Donald Trump — a purveyor of both.
Speculation has arisen as to whether Musk will allow the return of Trump — who was banned from Twitter after inciting the riot on Jan. 6. So far, Trump appears unlikely to do so. He said he will remain on the platform he created — Truth Social. “I am not going on Twitter, I am going to stay on TRUTH,” Trump told Fox News. “I hope Elon buys Twitter because he’ll make improvements to it and he is a good man, but I am going to be staying on TRUTH.”
Trump launched the platform in October 2021, but you could be forgiven for not having know that. MSNBC host Nicole Wallace could not even remember the name of the platform on her show “Deadline: White House”, and her panelists offered withering critiques of the site. “I fully expect that he will not stand by his pledge today,” Politico editor Sam Stein opined, adding: “Truth Social is, at least at this juncture, a disaster. I think it’s objectively been a huge failure for him.”
“The site, as we’ve reported; it’s plagued by technical snafus; there’s internal discord — at least three top executives have already left — there’s virtually no one of stature from his world [or universe] who is posting with regularity there; and the fact is, he’s only posted once.”
“Truth Social — stick a fork in it, it’s done,” said New York times reporter Kara Swisher: “It’s a terrible startup, run by people who have no idea how to run a startup.” She added: “I could start a social network that’s more popular than that.” For the time being, however, Trump appears to be sticking with “Truth” — and at least one prominent voice wants it to stay that way.
Derrick Johnson, President of the NAACP, urged Musk to keep Trump off Twitter. In a statement posted on the organization’s website, he wrote: “Mr. Musk: free speech is wonderful, hate speech is unacceptable. Disinformation, misinformation and hate speech have NO PLACE on Twitter. Do not allow 45 to return to the platform. Do not allow Twitter to become a petri dish for hate speech, or falsehoods that subvert our democracy. Protecting our democracy is of utmost importance, especially as the midterm elections approach. Mr. Musk: lives are at risk, and so is American democracy.”
UPDATE (April 30. 2022): Today, Musk has been trending for hours, slammed by many Twitter users after wading into a debate about the effects of certain medications like Wellbutrin (also known as bupropion) and Adderall (aka amphetamine, or dextroamphetamine).
The drama started today, with a tweet from Marc Andreessen. (Mr. Andreessen co-authored Mosaic, the first widely used browser, and also co-founded Netscape.) Marc Andreessen, a Silicon Valley investor, originally posted an excerpt from a New York Times article about Adderall usage and withdrawal. “Everyone thinks our present society was caused by social media. I’m wondering whether Adderall plus ubiquitous Google searches have bigger effects,” he wrote.
In response, Musk commented: “Wellbutrin is way worse than Adderall IMO [in my opinion]. It should be taken off the market. Every time that drug has come up in conversation, someone at the table has a suicide or near-suicide story.”
It’s worth noting that neither Musk nor Andreessen are medical doctors. Also, Wellbutrin and Adderall are different medications with distinctly different uses. According to the National Alliance on Mental Illness, “Bupropion is an antidepressant medication that works in the brain. It is approved for the treatment of major depressive disorder (MDD), seasonal affective disorder (SAD), and to help people quit smoking (smoking cessation). Depression is a disorder that often involves feelings of fatigue, persistent sadness, and/or a loss of interest in things one used to enjoy. SAD is a type of depression that occurs mainly during the autumn-winter season.
Adderall, on the other hand, is a CNS (central nervous system ) stimulant. It is a prescription medication; doctors tend to use Adderall to treat either attention deficit hyperactivity disorder (ADHD) or narcolepsy. ADHD is a developmental disorder marked by inattention, hyperactivity, and impulsivity. Narcolepsy is a common sleep disorder in which one may fall asleep during the day or at random periods.
Musk’s tweet prompted immediate pushback, as shown above .