Elon Musk, a self-described “free-speech absolutist,” recently sealed an agreement to acquire Twitter for $44 billion. The deal, which will be one of the largest takeovers in recent years, has inspired some to say that the world’s richest man is spending billions of dollars to buy free speech.
The CEO of Tesla and SpaceX has repeatedly criticized the social media site for restricting free speech.
According to Musk, free speech is “the bedrock of a functioning democracy” and Twitter serves as “the digital town square,” where important issues are discussed.
The Media Research Center has identified about
3,600 instances of censorship on big tech platforms, with conservative content being the primary target. Twitter was involved in more than half of the censorship cases, the right-leaning media watchdog group found. The list includes suspending the accounts of sitting President Donald Trump in January 2021 and censoring the New York Post’s Hunter Biden laptop stories.
The Babylon Bee, a conservative satire news site, parodied Musk’s Twitter offer in a
story: “Due to Inflation, the Cost of Free Speech Has Increased Sharply to $43 Billion.” The site had been suspended from Twitter after naming a transgender White House official “Man of the Year” in a post in March.
The Washington Times reported that Musk had reached out to
Seth Dillon, CEO of the Babylon Bee, to confirm the suspension. It was during this chat that Musk mused that he might need to buy Twitter.
In December last year, the world’s wealthiest man gave a lengthy interview to the satirical news site.
“I wouldn’t suggest that The Babylon Bee is the sole reason Musk decided to take action,” Dillon told The Washington Times, adding that the suspension of the site by Twitter may have factored into his decision. “Perhaps it was the last straw.”
On April 25, Twitter
accepted the billionaire entrepreneur’s proposal of $54.20 per share in cash, which put the firm’s value at about $44 billion.
Musk has secured $25.5 billion in loans, backed in part by a portion of his stake in Tesla, according to the
announcement. He has also promised to provide nearly $21 billion in cash, but it’s unclear how he'll raise that amount.
If the deal is finalized, it would be the largest take-private deal since Dell acquired data storage giant EMC for $67 billion in 2016, according to
PitchBook.
The price offered by Musk represents a
38 percent premium to Twitter’s closing stock price on April 1, which was the last trading day before Musk revealed his nearly 9 percent stake in Twitter.
Because of the high price, some have questioned whether Musk can turn the company around and generate value from this mega deal.
“I don’t care about the economics at all,” the billionaire said at a
TED conference in Vancouver, Canada, a day after he offered to acquire 100 percent of the company.
Going private is mostly promoted by private equity investors as a way for businesses to conduct a
turnaround away from the public eye. This strategy can provide a chance for struggling public firms to restructure and make operational adjustments with the prospect of going public again in the future after issues are resolved.
Take-private activity peaked in 2007 and has failed to recover to pre-global financial crisis levels.
Musk considered taking Tesla private for $420 a share in 2018, valuing it at $72 billion. However, Musk was later accused by the Securities and Exchange Commission of deceiving investors by falsely stating on Twitter that he had secured funding to take the company private.
As a result, Musk paid the regulator $20 million and resigned from Tesla’s board of directors. With the automaker’s market value now hovering near $1 trillion, taking the firm private would have been a profitable move for Musk, according to Pitchbook.
The Twitter deal is expected to be finalized before Oct. 24, according to the merger agreement between Musk and the company.
Some shareholders are calling on Musk to accept them as investors in the private corporation.
Musk
said during the TED conference that he intends to keep as many stockholders as the law allows in the private company.
“We’ll try to bring along as many shareholders as we’re allowed to,” he said.
