At close of business yesterday, the financial press was agog with the news that Twitter Inc. was poised to agree a sale to Elon Musk for around $43 billion in cash, the price the CEO of Tesla has called his "best and final" offer for the social media company, people familiar with the matter said.
Monday, Twitter shares were up 4.5% in pre-market trading in New York at $51.15, still well below the $54.20-per-share deal Elon Musk is offering. NewMax reported Twitter (TWTR) was up 2.2% in premarket trading, to $51.50. Trading in the stock was halted at 2:41 p.m. at $51.63.
Moments after the news broke that Twitter trading was halted, the company issued a press release confirming that it was accepting Musk’s offer to take the social network private. Late Monday afternoon Reuters reported the transaction was approved by the board and is now subject to a shareholder vote.
In a prepared statement the company said Musk secured $25.5 billion of debt and margin loan financing and is providing a $21 billion equity commitment.
Our friends at NewsMax report Musk unveiled his plan to take Twitter private via a financing package comprised of equity and debt. Wall Street's biggest lenders, except those advising Twitter, have all committed to provide debt financing according to the NewsMax report.
Mr. Musk, the world's richest person according to Forbes, is negotiating to buy Twitter in a personal capacity and his flagship company, the Tesla electric vehicle manufacturing giant, is not involved in the deal.
Having a social media platform with Twitter’s reach owned by a slightly eccentric libertarian-leaning billionaire could be fun – and with Elon taking Twitter private he would be calling all the shots; he would have no partners or institutional investors to satisfy.
We like the idea of Elon Musk buying Twitter mostly for the amusing reactions the gambit has elicited from Democrats and cancel culture Left, but is it going to actually change anything in America’s political discourse?
For starters, let’s remember Twitter is not really a going business.
The company is not making an operating profit, so the only payout investors are going to get for the foreseeable future is appreciation in the value of their shares – and the power to control one very active and important corner of the public square.
In 2021, Twitter's annual net loss amounted to 221 million U.S. dollars. Overall, this is a significant decrease from the previous year, in which the micro blogging and social network company saw losses of almost 1.4 billion U.S. dollars. Twitter's losing money big-time, and the picture's not improving. After losing a total of $2.3 billion from 2013 (the year it went public) through 2017, Twitter only booked profits in 2018 and 2019.
In a message to Bret Taylor, the chairman of Twitter’s board, Mr. Musk said: “I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” according to a filing with the Securities and Exchange Commission that was later made public. “Twitter needs to be transformed as a private company.”
Mr. Taylor, a co-chief executive of Salesforce, has served on Twitter’s board since 2016, when Salesforce considered buying Twitter. Mr. Taylor joined Salesforce a year later, after it acquired his own company, Quip.
Here’s the thing, Salesforce is about as “woke” as you can get.
Investigative journalism group Project Veritas recently published a report detailing plans by the cloud-based software giant Salesforce to de-platform customers who have “the potential to incite politically motivated violence.” According to the Project Veritas video, executives are communicating with the RNC specifically about messages from former President Donald Trump. Project Veritas reports that its own business account with Salesforce has been cut off.
Taylor: “What we’ve done in light of the events of Jan. 6 is recognize a much broader range of messages have the potential to incite politically motivated violence.”
Taylor: “We’ve engaged with the RNC to communicate that no messages on behalf of President Trump and no messages questioning the validity or integrity of the election are allowed on our platform under the guidelines that they may incite violence.”
Taylor: “We’re looking across our customer base to make sure our technology is not being used by businesses or platforms that are inciting political violence.”
Obviously, with board members like Brett Taylor holding views so far divergent from his own it seems obvious Musk will start revamping Twitter by getting rid of the “woke” elements at the company, but how far down into Twitter’s cube farms can Elon reach?
It is worth noting that Twitter’s two years of operating profit, 2018 and 2019, came at the height of the Trump administration and Donald Trump’s use of the platform, which makes an interesting, while not necessarily dispositive case for bringing Trump back to Twitter.
However, Trump has said he won’t return to Twitter and will use his Truth Social as his preferred social media platform – even though as far as we can tell he has only posted to Truth Social twice since the platform launched.
In the meantime, Media Matters for America and other Leftwing advocacy groups are already gearing up to oppose Elon Musk and the management changes he is expected to make.
"There is still time for Twitter’s board to prevent some of the worst harms. Any negotiations to sell Twitter to Musk must include clear enforceable mechanisms to uphold and maintain existing community standards, including the removal of those who violate those standards," said Angelo Carusone, president of the Far Left cancel culture group.
Twitter says the transaction, which was unanimously approved by the board, will likely close this year following shareholder and regulatory approval and “the satisfaction of other customary closing conditions.” Until those matters are resolved, it’s not a done deal.
We applaud Elon Musk for putting his money behind free speech and for making free speech and openness the cornerstones of his aspirations for Twitter, however, it remains to be seen whether the Left will let go of the power controlling Twitter brings them. Will there be specious regulatory hurdles thrown up by the Biden administration and what kind of internal sabotage will Mr. Musk’s effort to reorient the company toward a profitable free speech model face?
No one knows the answers to any of these questions and until we do, no one knows if anything will change at Twitter with Elon Musk in charge.
Board of Shareholders
Donald Trump Twitter suspension
Twitter CEO Parag Agrawal