Billionaire Elon Musk buys Twitter, an approximately $3 billion (£2.3 billion) investment in Twitter to become the social media platform’s largest shareholder. The world’s richest man, who has a tendency for eccentric conduct, usually including tweets, has accumulated a 9.2 percent investment in Twitter, according to papers issued to the US Securities and Exchange Commission (SEC) on Monday.
The chairman of Tesla and SpaceX, who with more than 80 million followers ranks in the worldwide top 10 of the most popular users on the microblogging site, spent $2.89 billion for the stake at Twitter’s closing share price on Friday. The company’s shares rocketed by more than a quarter in pre-market trade on the strength of the announcement, adding roughly $8 billion to its $31.5 billion valuation, before falling back to 21 percent in early trading.
After the stock price spike, Musk’s shares are now worth more than $3.5 billion. On Monday, the Twitter board voted to accept Elon Musk’s bid to purchase the social media business like Elon Musk buys Twitter. Musk claimed he would take Twitter private amid an effort to restore “free speech” to the social site.
Twitter shareholders would get $54.20 in cash for each share of Twitter common stock, which would value the arrangement at $44 billion, or a 38 percent price premium over Twitter’s share price on April 1, when Musk declared his 9 percent ownership in the firm. According to a statement by Twitter, Musk has secured $25.5 billion of fully committed debt and margin loan funding and is himself giving an approximately $21 billion equity commitment. He will take the firm private.
The purchase is likely to be finalized in 2022, subject to the approval of Twitter shareholders and regulatory bodies. Musk, who is already the chief executive of SpaceX and Tesla, and the founder of the underground tunnel firm the Boring Company, now adds the social media behemoth Twitter to his stable. Musk’s dedication to Twitter has never been properly confirmed till now.
Musk’s on-again, off-again position began in 2018 with a tweet in which he stated that he was raising funds to buy Twitter and take it private, a statement he later admitted was a joke following an SEC investigation.
In fact, Musk committed the same acts today. Musk then tweeted in December, “depicting [Twitter CEO Parag] Agrawal as Soviet dictator Joseph Stalin and Dorsey as Soviet secret police leader Nikolai Yezhov being dragged into water,” according to Bloomberg.
Musk also inquired, via tweet, if his followers felt that Twitter preserved free expression. Free speech is the core of a functional democracy, and Twitter is the digital town square where things crucial to the future of mankind are debated, Musk said in a statement.
“I also want to make Twitter better than ever by expanding the product with new features, making the algorithms open source to promote trust, beating the spam bots, and authenticating all users.” Twitter has immense potential. I look forward to working with the company and the community of users to unleash it. “
In this case, Twitter won’t have a conference call to talk about the decision. It will report its first-quarter earnings on April 28.
Transaction Terms and Financing
The deal, which has been unanimously authorized by the Twitter Board of Directors, is scheduled to close in 2022, subject to the approval of Twitter stockholders, the receipt of appropriate regulatory approvals and the fulfillment of other usual closing conditions. Elon Musk buys Twitter and Mr. Musk has secured $25.5 billion in fully committed debt and margin loan funding, as well as a $21.0 billion equity commitment.There are no financing constraints to the conclusion of the transaction. For detailed information covering the terms and conditions contained in the formal transaction agreement, please consult Twitter’s current report on Form 8-K, which will be filed in conjunction with the transaction.
Earnings for the First Quarter of 2022
Twitter expects to report earnings for the first quarter of fiscal year 2022 before the market opens on April 28, 2022.In light of the deal that was announced today, Twitter will not be having a conference call like the one they usually have.
Advisors – Elon Musk buys Twitter
Goldman Sachs & Co. LLC, J.P. Morgan, and Allen & Co. are acting as financial advisors to Twitter, while Wilson Sonsini Goodrich & Rosati, Professional Corporation, and Simpson Thacher & Bartlett LLP are providing legal counsel. Morgan Stanley is acting as the principal financial advisor to Mr. Elon Musk buys Twitter. BofA Securities and Barclays are also functioning as financial advisors. Assisting as legal counsel is Skadden, Arps, Slate, Meagher & Flom LLP.
About Twitter, Inc.
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