Elon Musk on Monday reached a deal to buy Twitter for around US$44 billion, promising a more lenient approach to controlling content on the social media platform where he – the world’s richest person – promotes his interests, attacks critics and speaks out on a wide range of issues to more than 83 million followers.
The outspoken Tesla CEO has said he wants to own and privatize Twitter because he thinks it doesn’t live up to its potential as a platform for free speech.
Musk said in a joint statement with Twitter that he wanted to make the service “better than ever” with new features while getting rid of automated “spam” accounts and making its algorithms open to the public to increase trust.
“Free speech is the foundation of a functioning democracy, and Twitter is the digital city square where issues vital to the future of humanity are debated,” Musk, 50, said, adding comments. hearts, stars and rocket emojis in a tweet that highlighted the statement.
The more passive approach to content moderation envisioned by Musk has many users worried that the platform could become more of a haven for misinformation, hate speech and bullying, which it has been working hard on these days. last years to mitigate. Wall Street analysts said going too far could alienate advertisers as well.
The deal was completed around two weeks after the billionaire first revealed a 9% stake in the platform. Musk said last week he had secured $46.5 billion in funding to buy Twitter, pressuring the company’s board to broker a deal.
Twitter said the transaction had been unanimously approved by its board of directors and is expected to close in 2022, pending regulatory approval and shareholder approval.
Shares of Twitter Inc. rose more than 5% on Monday to US$51.70 per share. On April 14, Musk announced an offer to buy Twitter for US$54.20 per share. Although the stock has risen sharply since Musk made his offer, it is well below the high of US$77 per share reached in February 2021.
Musk has described himself as a “free speech absolutist,” but he’s also been known to block or denigrate other Twitter users who question or disagree with him.
In recent weeks, he has offered to ease content restrictions on Twitter — such as rules that suspended former President Donald Trump’s account — while ridding the platform of fake “spambot” accounts and displacing advertising as the primary revenue model. Musk thinks he can boost his revenue through subscriptions that give paying customers a better experience — maybe even an ad-free version of Twitter.
When asked in a recent TED interview if there were any limits to his notion of “free speech,” Musk said Twitter would abide by national laws that restrict free speech in the world. world. Beyond that, he said, he would be “very reluctant” to remove posts or permanently ban users who violate company rules.
It won’t be perfect, Musk added, “but I think we want him to really have the perception and the reality that speech is as free as reasonably possible.”
After the deal was announced, the NAACP issued a statement urging Musk not to allow Trump, the 45th president, to return to the platform.
“Do not allow 45 to return to the platform,” the civil rights organization said in a statement. “Don’t let Twitter become a petri dish for hate speech or lies that subvert our democracy.”
As a candidate and president, Trump has made Twitter a powerful megaphone for speaking directly to the public, often using inflammatory and divisive language on burning issues. He was permanently banned from the service following the storming of the Capitol on January 6.
Advertisers, currently Twitter’s biggest customers, have also pushed for the stricter content rules criticized by Musk. Keeping them happy means moderating hate speech so brands don’t try to promote their products alongside “calls for genocide,” said Siva Vaidhyanathan, a professor of media studies at the University of Virginia.
“If Musk fires or fires the team at Twitter that is committed to keeping it clean and making it less hateful, he will see an immediate drop in user activity,” Vaidhyanathan said. “I think he’ll soon find out that inviting fanatics back is bad for business.”
Some users said on Monday that they plan to leave the platform if Musk takes it over. To which he replied on Twitter: “I hope even my worst critics stay on Twitter because that’s what free speech means.”
Musk has also run into trouble with federal officials following his own tweets, some of which are used to taunt regulators at the Securities and Exchange Commission.
In an August 2018 tweet, for example, Musk claimed he had the funds to take Tesla private for $420 a share, although a court ruled that was not true. This led to an SEC investigation that Musk is still battling. More recently, Musk appears to have violated SEC rules that required him to disclose that he acquired a 5% stake in Twitter; instead, he waited until he had more than 9 percent. Experts say these issues are unlikely to affect its acquisition of Twitter.
While Twitter’s user base of over 200 million remains far below rivals such as Facebook and TikTok, the service is popular with celebrities, world leaders, journalists and intellectuals. Musk himself is a prolific tweeter with a following that rivals several pop stars in the ranks of the most popular accounts.
Last week he said in SEC filings that the money would come from Morgan Stanley and other banks, some of which was secured by his huge stake in Tesla, the electric vehicle company he runs.
Musk has a fortune of nearly $268 billion, much of it tied to Tesla stock and SpaceX, his private space company. It’s unclear how much money Musk has.
Musk made his fortune in 1999 when he sold Zip2, an online mapping and business directory, to Compaq for $307 million. He used his share to create what would become PayPal, an internet service that bypassed banks and allowed consumers to pay businesses directly. It was sold to eBay for US$1.5 billion in 2002.
That same year, Musk founded Space Exploration Technologies, or SpaceX, after finding that cost constraints were limiting NASA’s interplanetary travel. The company eventually developed cost-effective reusable rockets.
In 2004, Musk was courted to invest in Tesla, then a startup trying to build an electric car. Eventually, he became CEO and led the company to astronomical success as the world’s most valuable automaker and biggest seller of electric vehicles.
Musk’s promise to make Twitter a safe haven for free speech could dampen the appeal of Donald Trump’s troubled Truth Social app, which the former president has touted as a Twitter competitor that would cater to conservatives . Truth Social is part of Trump’s new media company, which has agreed to go public with Digital World Acquisition Corp. Shares of DWAC have fallen 16.2% on Monday and 46% since Musk revealed his Twitter stake.
Krisher reported from Detroit. O’Brien reported from Providence, Rhode Island. AP Business writers Marcy Gordon in Washington, Barbara Ortutay in Oakland, Calif., and Kelvin Chan in London contributed to this report.
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