Elon Musk seals $44 bn cash deal to buy Twitter

Elon Musk clinched a deal to buy Twitter for $44 billion in cash on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.
Twitter developersTwitter’s revenue increased 37 percent to $5.08 billion with operating loss of $493 million, or an operating margin of -10 percent, includes a one-time litigation-related net charge of $766 million , as well as investments, in 2021.

Twitter’s 2021 adjusted operating income, which excludes the one-time litigation-related net charge, was $273 million reflecting an adjusted operating margin of 5 percent. Operating income was $27 million in 2020, which includes a $150 million non-recurring expense related to an ongoing FTC matter in Q2 of 2020, representing an operating margin of 1 percent.

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Elon Musk has criticized Twitter’s moderation, saying that Twitter’s algorithm for prioritizing tweets should be public and criticized giving too much power on the service to corporations that advertise.

Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer, Reuters news report said.

“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,” Elon Musk said in a statement.
Twitter buyer Elon MuskParag Agrawal, CEO of Twitter, said in a news statement: “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”

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Twitter shares rose 5.7 percent on Monday to close at $51.70. The deal represents a near 40 percent premium to the closing price the day before Musk disclosed he had bought a more than 9 percent stake.

“I think if the company were given enough time to transform, we would have made substantially more than what Musk is currently offering,” said Jonathan Boyar, managing director at Boyar Value Group, which holds a stake in Twitter.

Musk’s move continues a tradition of billionaires buying control of influential media platforms that include Rupert Murdoch’s takeover of the New York Post in 1976 and the Wall Street Journal in 2007 and Jeff Bezos’ 2013 acquisition of the Washington Post.

Twitter said Musk secured $25.5 billion of debt and margin loan financing and is providing a $21 billion equity commitment.

Musk, who is worth $268 billion according to Forbes, has said he is not primarily concerned with the economics of Twitter.

Musk is chief executive of electric car maker Tesla and aerospace company SpaceX, and it is not clear how he much time he will devote to Twitter.

“This is great news for Twitter shareholders as it doesn’t seem like the company was going to get things right anytime soon. Tesla shareholders can’t be happy that Musk will have to divert even more attention away from winning the EV (electric vehicle) race,” Edward Moya, and analyst at currency broker OANDA, said in an email to clients.

The Twitter transaction was approved by the board and is now subject to a shareholder vote. No regulatory hurdles are expected, analysts said.

Daniel Ives, an analyst at Wedbush, said the company’s board of directors had its back against the wall once Musk detailed his financing package and no other bidders or white knights emerged.

It was not immediately clear what the breakup fee would be or who would run the new company.

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