What Does Elon Musk's Purchase of Twitter Mean for Business Users?

 

Twitter's neTwitter's new billionaire owner could imply huge changes, but there's still a lot of uncertainty for business users.

Elon Musk, the Tesla founder and mining heir, has agreed to buy Twitter for $44 billion in a deal that will turn the social media network into a privately held firm, with potentially huge repercussions for the site.

However, it's difficult to say how a Musk-led Twitter will differ from its shareholder-owned version in the immediate aftermath of Monday's announcement. Musk alluded at numerous potential improvements in his statement announcing the go-private transaction, including "authenticating all humans," "fighting spam," and "improving the product with new features," but no details were provided.

According to the statement, Musk loves free expression and hopes to "make Twitter better than ever" in order to keep the platform's role as "the digital town square." Musk's dedication to free speech, according to Jillian York, director of international freedom of expression at the Electronic Frontier Foundation, is severely questioned.

Musk's dedication to free speech has been called into question.

"He's talked about being a free-speech absolutist," York said, "but he doesn't really have the credentials to back it up." Musk has taken legal action against others who have openly attacked him in the past.

Musk's ownership, along with the fact that direct chats on the site remain unencrypted, might pose a concern for corporate users, according to York.

"People have been pleading with Twitter for years to encrypt direct communications," she said. "In theory, this means [Musk] has access to your DMs. And it might be a problem for businesses."

However, there's reason to suppose that, in the short run, the takeover of Twitter by Musk will have little impact. The folks who make crucial decisions on content policy and moderation will still be there unless Musk fires a large number of employees and replaces them.

"It's difficult for me to understand how this is better or worse for users than a group of stockholders controlling the company," York added.

Furthermore, she noted, it's difficult to see how Musk might achieve some of the stated goals he mentioned in today's announcement.

"It's difficult to go after bots and misinformation," she remarked. "So I believe he'll run into a really difficult challenge when he tries to deal with it."

 

Twitter investors will get $54.20 in cash for each share of Twitter common stock they own when the proposed transaction closes, which is expected to happen by the end of the year and is subject to regulatory approval.

According to the firm, the purchase price is a 38 percent premium to Twitter's closing stock price on April 1, the last trading day before Musk officially announced a 9 percent ownership in the company. Following that revelation, Musk publicly offered to buy Twitter, and the company initially appeared to be ready to reject the offer — it adopted a so-called "poison pill" restriction, which states that if any person or group acquires at least 15% of Twitter's outstanding common stock without the board's approval, other shareholders will be allowed to purchase additional shares at a discount.

However, in the end, the board accepted the offer.

"Elon's proposal was evaluated by the Twitter Board in a rigorous and thorough manner, with a deliberate focus on value, certainty, and funding. The proposed transaction will provide a significant cash premium to Twitter stockholders, and we believe it is the best path ahead for the company's owners "Twitter's independent board chair, Bret Taylor, said in a statement.

Musk has acquired $25.5 billion in debt and margin loan funding, as well as $21.0 billion in cash, to conclude the deal.w billionaire owner could imply huge changes, but there's still a lot of uncertainty for business users.

Elon Musk, the Tesla founder and mining heir, has agreed to buy Twitter for $44 billion in a deal that will turn the social media network into a privately held firm, with potentially huge repercussions for the site.

However, it's difficult to say how a Musk-led Twitter will differ from its shareholder-owned version in the immediate aftermath of Monday's announcement. Musk alluded at numerous potential improvements in his statement announcing the go-private transaction, including "authenticating all humans," "fighting spam," and "improving the product with new features," but no details were provided.

According to the statement, Musk loves free expression and hopes to "make Twitter better than ever" in order to keep the platform's role as "the digital town square." Musk's dedication to free speech, according to Jillian York, director of international freedom of expression at the Electronic Frontier Foundation, is severely questioned.

Musk's dedication to free speech has been called into question.

"He's talked about being a free-speech absolutist," York said, "but he doesn't really have the credentials to back it up." Musk has taken legal action against others who have openly attacked him in the past.

Musk's ownership, along with the fact that direct chats on the site remain unencrypted, might pose a concern for corporate users, according to York.

"People have been pleading with Twitter for years to encrypt direct communications," she said. "In theory, this means [Musk] has access to your DMs. And it might be a problem for businesses."

However, there's reason to suppose that, in the short run, the takeover of Twitter by Musk will have little impact. The folks who make crucial decisions on content policy and moderation will still be there unless Musk fires a large number of employees and replaces them.

"It's difficult for me to understand how this is better or worse for users than a group of stockholders controlling the company," York added.

Furthermore, she noted, it's difficult to see how Musk might achieve some of the stated goals he mentioned in today's announcement.

"It's difficult to go after bots and misinformation," she remarked. "So I believe he'll run into a really difficult challenge when he tries to deal with it."

 

Twitter investors will get $54.20 in cash for each share of Twitter common stock they own when the proposed transaction closes, which is expected to happen by the end of the year and is subject to regulatory approval.

According to the firm, the purchase price is a 38 percent premium to Twitter's closing stock price on April 1, the last trading day before Musk officially announced a 9 percent ownership in the company. Following that revelation, Musk publicly offered to buy Twitter, and the company initially appeared to be ready to reject the offer — it adopted a so-called "poison pill" restriction, which states that if any person or group acquires at least 15% of Twitter's outstanding common stock without the board's approval, other shareholders will be allowed to purchase additional shares at a discount.

However, in the end, the board accepted the offer.

"Elon's proposal was evaluated by the Twitter Board in a rigorous and thorough manner, with a deliberate focus on value, certainty, and funding. The proposed transaction will provide a significant cash premium to Twitter stockholders, and we believe it is the best path ahead for the company's owners "Twitter's independent board chair, Bret Taylor, said in a statement.

Musk has acquired $25.5 billion in debt and margin loan funding, as well as $21.0 billion in cash, to conclude the deal.