Has Elon Musk bought Twitter?
Elon Musk has received $7.1 billion from nearly two dozen investors including Sequoia Capital, Andreessen Horowitz, and others to fund his purchase of Twitter.
The news comes after the billionaire sold nearly $8.5bn worth of Tesla stock.
Qatar – giving $375,000,000 – and Saudi Arabia will also be financing the deal.
Saudi Prince Alwaleed bin Talal, chairman of the board at Kingdom Holding Company and one of Twitter’s largest backers, said he is rolling over his current investment after initially criticising Mr Musk.
Mr Musk will pay $54.20 cash per share for the San Francisco-based company, which will now be taken private before the end of October.
The board announced it had reached a deal with Mr Musk on Monday, and that it represented a 38 per cent premium from Twitter’s closing price on 1 April, the day before the world’s richest person made his move for the company by announcing his nine per cent stake.
Mr Musk will likely make some significant changes to the social media platform, having made several hints in recent months about what his intentions are. It comes after Musk’s friend Dorsey stepped down as CEO and Parag Agrawal took over.
Changes could include a new CEO, worker layoffs and even monetising tweets by charging publishers to embed them, according to some reports.
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However one of Mr Musk’s main proposals, opening up the Twitter algorithm, is confusing.
“This one is a head-scratcher to me,” Mr Roetter said, because the algorithms in itself will not reveal much.
Twitter’s ranking algorithms look at billions of examples of content in an attempt to predict how users might react to other content.
“It doesn’t say, if you are Republican, then you’re banned,” Mr Roetter said. “There’s just nothing like that.”
Mr Musk will find it difficult to have a free speech approach “that’s going to make everybody happy,” the former Twitter head said, but was more supportive of the idea of subscription fees.
“It’s a really interesting idea,” Mr Roetter said. “If you don’t want a bunch of what you think of as low-value activity to happen, if you charge more than the value that you think people are extracting from it, it should go away.”
Elon Musk will be Twitter’s chief executive when he buys it
It gave no indication of whether the information had come from Mr Musk or Twitter’s side of the deal.
Mr Musk has been critical of the current Twitter management, and has suggested that disagreements with its current leadership about how the social network is run are at least part of the reason for him to buy the company.
In his initial letter making an offer for the company, sent to it chairman of the board Bret Taylor, Mr Musk said that he does not “have confidence in management”. That lack of confidence would lead him to “reconsider his position as a shareholder” if he is not able to buy the company, he said then.
Mr Musk’s aim to defeat spam bots may prove more challenging.
Mr Roetter told CNBC that Twitter would need to build a classifier that looks for characteristics of bots and then bans them.
The classifier would either be tuned to be aggressive, where it could also ban human “false positives,” or be less aggressive and allow some bots to slip through.
“I think you should do it,” Mr Roetter said. “But everyone should be prepared, there is no perfect spam bot classifier.”
Twitter’s former head of engineering comments on Musk’s planned takeover
Alex Roetter, Twitter’s former head of engineering, gave CNBC his views on Elon Musk’s proposed changes on the Big Technology podcast.
Mr Musk said he wanted to “authenticate all humans”, something that the company has been weighing internally but has always ran into issues around. Twitter has opened, and closed, its verification program numerous times.
Pure anonymity, Mr Roetter said, “fosters the worst parts of speech online”, so is in favour of Mr Musk’s program. However, critics have pointed out that anonymity allows people the ability to speak freely – especially for whistleblowers or people in repressive countries – something that ‘free speech absolutionist’ Mr Musk has advocated for.
Mr Musk has claimed to be a free speech absolutist but countries such as Qatar have been criticised for their repressive laws.
“Qatar already has a host of repressive laws, but this new legislation deals another bitter blow to freedom of expression in the country and is a blatant breach of international human rights law,” said Lynn Maalouf, Research Director for the Middle East at Amnesty International, of a law passed in 2020 that authorizes the imprisonment of “anyone who broadcasts, publishes, or republishes false or biased rumours, statements, or news, or inflammatory propaganda, domestically or abroad, with the intent to harm national interests, stir up public opinion, or infringe on the social system or the public system of the state”.
Mr Musk is also said to be engaging with certain additional existing shareholders including Twitter co-founder and former chief executive Jack Dorsey, who may roll over his shares
Prince Al Waleed bin Talal Al Saud of Saudi Arabia has also committed to providing nearly 35 million shares in Twitter to retain a stake following the company’s takeover by Mr Musk.
This is despite previously criticising Mr Musk’s takeover.
“I don’t believe that the proposed offer by Elon Musk ($54.20 per share) comes close to the intrinsic value of Twitter given its growth prospects,” the prince said in a Twitter post on 14 April.
Oracle co-founder Larry Ellison is providing $1 billion. Sequoia has is providing $800 million. VyCapital is providing $700 million, while Binance financed $500 million and Andreessen Horowitz has invested $400 million.
New filings show how Elon Musk will fund Twitter takeover
A new Securities and Exchange Commission filing provides some insight into how Mr Musk will be purchasing Twitter.
Funders include Binance and the venture capital firm Andreessen Horowitz.