Elon Musk clinched a deal to buy Twitter Inc. for $44 billion 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.
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It is a seminal moment for the 16-year-old company, which emerged as one of the world's most influential public squares and now faces a string of challenges.
Musk, a self-professed "free speech absolutist," has criticized Twitter's moderation. He wants Twitter's algorithm for prioritizing tweets to be public and objects to giving too much power on the service to corporations that advertise.
Political activists expect that a Musk regime will mean less moderation and reinstatement of banned individuals including former President Donald Trump. Conservatives cheered the prospect of fewer controls while some human rights activists voiced fears of a rise in hate speech.
Musk has also advocated user-friendly tweaks to the service, such as an edit button and defeating "spambots" that send overwhelming amounts of unwanted tweets.
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
Under pressure, Twitter started negotiating with Musk to buy the company at his proposed $54.20 per share price.
"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," Musk said in a statement.
Chief Executive Parag Agrawal told employees on Monday that the future of the social media firm is uncertain after the deal to be taken private under Musk closes. He was speaking during a company-wide town hall meeting.
Musk will join Twitter staff for a question-and-answer session at a later date, the company told employees.
As Agrawal listened to staff questions about Musk's plans for the company, the possibility of layoffs and the board's rationale for the deal, he deferred many questions as ones that should be asked of Musk.
Musk has said he believes Twitter should be a platform for free speech. Employees asked Agrawal whether former U.S. President Donald Trump, who was permanently suspended from Twitter last year, would be allowed to return once Musk takes over.
"Once the deal closes, we don't know which direction the platform will go," Agrawal said, referring to the question regarding Trump. "I believe when we have an opportunity to speak with Elon, it's a question we should address with him."
Agrawal also told employees there were no plans for layoffs.
Bret Taylor, chair of Twitter's board of directors, aimed to reassure employees that the agreement with Musk prioritized "operating continuity" until the deal was closed.
"I think we feel very comfortable that (the deal) gives this team the ability to continue to make the company successful in between signing and closing the transaction," Taylor said.
Former Twitter CEO Jack Dorsey weighed in on the deal late on Monday with a series of tweets that thanked both Musk and current Twitter CEO Parag Agrawal for "getting the company out of an impossible situation."
"Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step," he said.
Twitter shares rose 5.7% on Monday to finish at $51.70. The deal represents a near 40% premium to the closing price the day before Musk disclosed he had bought a more than 9% stake.
Even so, the offer is well below the $70 range where Twitter was trading last year.
"I think if the company was 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. However, he added, "If the public markets do not properly value a company, an acquirer eventually will."
Musk's move continues a tradition of billionaires' buying control of influential media platforms, including 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.
"Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don't care about the economics at all," he said in a recent public talk.
Musk is chief executive of both electric car maker Tesla and aerospace company SpaceX, and it is not clear how much time he will devote to Twitter or what he will do.
"Once the deal closes, we don't know which direction the platform will go," Agrawal told employees on Monday.
The Twitter transaction was approved by the company's 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 emerged.
The White House declined on Monday to comment on Musk's deal, but said President Joe Biden has long been concerned about the power of social media platforms.
"Our concerns are not new," said White House spokesperson Jen Psaki, adding that the platforms need to be held accountable. "The president has long talked about his concerns about the power of social media platforms, including Twitter and others, to spread misinformation."
Human rights groups concerned
Human rights groups on Monday raised concerns about hate speech on Twitter and the power that its takeover by Musk would give the billionaire.
"Twitter is not just another company," human rights advocates noted. "Regardless of who owns Twitter, the company has human rights responsibilities to respect the rights of people around the world who rely on the platform. Changes to its policies, features, and algorithms, big and small, can have disproportionate and sometimes devastating impacts, including offline violence," Deborah Brown, a digital rights researcher and advocate at Human Rights Watch, said.
"Freedom of expression is not an absolute right, which is why Twitter needs to invest in efforts to keep its most vulnerable users safe on the platform," she added.
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Twitter did not immediately respond to a request for comment on concerns raised by the groups.
"While Elon Musk is an ACLU card-carrying member and one of our most significant supporters, there's a lot of danger having so much power in the hands of any one individual," Anthony Romero, executive director at the American Civil Liberties Union, said.
Amnesty International said it was concerned about any potential decision that Twitter may take after Musk's takeover to erode enforcement of the policies and mechanisms designed to moderate hate speech online.
"The last thing we need is a Twitter that willfully turns a blind eye to violent and abusive speech against users, particularly those most disproportionately impacted, including women, non-binary persons, and others," Michael Kleinman, director of technology and human rights at Amnesty International USA, said on Monday.
