Twitter shares rise after Elon Musk $44bn takeover deal

The board of Twitter has agreed to a $44bn (£34.5bn) takeover offer from the billionaire Elon Musk.

Twitter shares on Monday closed more than five per cent higher after the deal was announced.

But the price remained lower than Musk’s $54.20 per share offer, a sign that Wall Street believes he is overpaying for the firm, according to a BBC report.

Musk, who made the shock bid less than two weeks ago, said Twitter had “tremendous potential” that he would unlock.

He has said he doesn’t “care about the economics” of the purchase. However, he will take on a company with a chequered record of financial performance.

Despite its influence, Twitter has rarely turned a profit and user growth, particularly in the US, has slowed.

The company, founded in 2004, ended 2021 with $5bn in revenue and 217 million daily users globally – a fraction of the figures claimed by other platforms such as Facebook.

Bret Taylor, chair of Twitter’s board, said it had fully assessed Musk’s offer and it was “the best path forward for Twitter’s stockholders”.

The firm initially rebuffed Musk’s bid, but it will now ask shareholders to vote to approve the deal.

Musk is the world’s richest person, according to Forbes magazine, with an estimated net worth of $273.6bn mostly due to his shareholding in electric vehicle maker Tesla which he runs. He also leads the aerospace firm SpaceX.

He has called for a series of changes at Twitter from relaxing its content restrictions to eradicating fake accounts.

“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 announcing the deal.

“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,” he added.

“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”

The move comes as Twitter faces growing pressure from politicians and regulators over the content that appears on its platform. It has drawn critics from left and right over its efforts to mediate misinformation on the platform.

In one of its most high-profile moves, last year, it banned former US President Donald Trump, perhaps its most powerful user, citing the risk of “incitement of violence”.

At the time Musk observed: “A lot of people are going to be super unhappy with West Coast high tech as the de factor arbiter of free speech.”

News of Musk’s takeover has been cheered by the right in the US, although Trump on Monday told Fox News he had no plans to rejoin the platform.

The White House declined to comment on the takeover but spokesperson Jen Psaki told reporters: “No matter who owns or runs Twitter, the President has long been concerned about the power of large social media platforms.”

Musk, who has more than 80 million followers on Twitter, has a controversial history on the platform himself.

In 2018, US financial regulators accused him of misleading Tesla investors with his tweets, claims that were resolved in a $40bn settlement and that Musk continues to deny.

And in 2019 he was hit with a defamation suit – which he successfully defeated – after calling a diver involved in rescuing schoolboys in Thailand “pedo guy” on the platform.

On Monday, Musk, who has been known to clash with journalists and block critics, suggested that he saw Twitter as a forum for debate.

“I hope that even my worst critics remain on Twitter, because that is what free speech means,” he wrote just hours before the deal was announced.

As part of the takeover, which is expected to close later this year, Twitter’s shares will be delisted and it will be taken private.

Musk has suggested this will give him freedom to make the changes he wants to the business.

Among other ideas, he has suggested allowing longer posts and introducing the ability to edit them after they have been published.