The high-profile billionaire founder/CEO of Tesla has a new business venture.
Social media platform Twitter Inc. has confirmed that it is entering into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company.
Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter's closing stock price on April 1, 2022, which was the last trading day before Musk disclosed his approximately 9% stake in Twitter.
Generally considered the wealthiest person on the planet, Musk has an estimated net worth of $264.6 billion. In addition to electric vehicle manufacturer/retailer Tesla, Musk’s other companies include private space travel company SpaceX and tunnel construction firm The Boring Company.
In addition to serving as a platform for users to post news, information, and personal thoughts, Twitter also serves as a vehicle for promoting and selling merchandise. Recent social commerce efforts by Twitter include the beta test of a new offering called Twitter Shop, which will allow retailers to curate a collection of up to 50 products to showcase to customers on their Twitter profile.
Twitter’s current Shop Module, initially piloted in July 2021, allows retailers to showcase up to five products directly on their profile. When consumers visit a profile with Shop Module enabled, they can scroll through a carousel of products and tap through on a single item to learn more and purchase seamlessly in an in-app browser, without having to leave Twitter.
Other recent efforts by Twitter to increase its utility as an e-commerce platform include the November 2021 debut of a livestream shopping event from a U.S. retailer, a 30-minute livestream shopping event held by Walmart during Cyber Week. Musk has not publicly discussed plans for any changes in Twitter’s e-commerce efforts.
"The Twitter board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing,” said Bret Taylor, Twitter independent board chair. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders."
"Twitter has a purpose and relevance that impacts the entire world,” said Parag Agrawal, Twitter CEO. “Deeply proud of our teams and inspired by the work that has never been more important."
"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," said Musk. "I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it."
The transaction, which has been unanimously approved by the Twitter board of directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and other customary closing conditions.
Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment. There are no financing conditions to the closing of the transaction.