Electric car mogul Elon Musk says he wants to turn Twitter into an enhanced “digital town square,” with a focus on “free speech”. Others aren’t so sure.
Tesla CEO and soon-to-be Twitter owner Elon Musk.
Twitter has accepted a takeover offer from Tesla boss Elon Musk which will see the billionaire acquire the social media platform for roughly $US44 billion.
The move could have wide-reaching effects on the way his electric vehicle manufacturer communicates with customers, and engages with the media.
The Tesla co-founder and CEO, who already owns a 9.2 per cent stake in Twitter, originally announced his plans to take the company private on April 14, offering to buy it at $US54.20 a share.
Twitter officially accepted the offer on April 25 – pending shareholder approval and regulatory sign-off – after a unanimous vote from its board of directors. It expects the deal to close in 2022.
“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 posted to Twitter confirming his bid had been accepted.
“Twitter has tremendous potential – I look forward to working with the company and users to unlock it.”
He added in a subsequent tweet: “I hope that even my worst critics remain on Twitter, because that is what free speech means.”
Twitter’s Board of Directors initially seemed opposed to Musks’ April 14 offer, launching a Limited Duration Shareholder Rights Plan to protect against a potential hostile takeover, but became more amenable to the plan after Musk revealed he had funding for the bid.
The world’s richest man confirmed he had secured commitment from Morgan Stanley Senior Funding for $US25.5 billion in loans and would supply an additional $US2.1 billion from his own personal fortune.
In a release confirming the deal, Bret Taylor, Twitter’s Independent Board Chair, said the board believed it would “deliver a substantial cash premium” and “is the best path forward for Twitter’s stockholders”.
Musk currently has 84.1 million followers on Twitter, while Tesla has 14.3 million followers – collectively making up roughly 45 per cent of Twitter’s 217 million active daily users.
Tesla regularly uses both Musk’s personal page and the official company page to announce key information to customers and shareholders, including quarterly earnings and major product launches and updates.
This strategy has previously landed the company in regulatory hot water.
In 2018, Musk was forced to step down as chairman of Tesla after he tweeted that he had “secured funding” for a deal to privatise, prompting the company’s share price to surge by more than 7 per cent in a day.
As a result, independent US regulatory agency, the Securities and Exchange Commission, sued Musk, accusing him of manipulating the market and misleading investors.
The ensuing settlement resulted in him paying $US20 million in personal fines and an additional $U20 million from Tesla.
Since then, all of Musk’s tweets became subject to SEC approval as part of a deal that remains to this day.
In early 2019, the SEC accused Musk of violating this agreement when he tweeted about Model 3 production numbers in a tweet that had not been pre-approved by the agency.
However, the SEC is holding firm, telling a judge in March 2022 that the agreement is still legitimate.
“So long as Musk and Tesla use Musk’s Twitter account to disclose information to investors, the SEC may legitimately investigate matters relating to Tesla’s disclosure controls and procedures, including Musk’s tweets about Tesla, as well as the accuracy of Tesla’s public statements about its controls and procedures,” the SEC said in a court filing in March 2022, according to Bloomberg.
Susannah Guthrie has been a journalist since she was 18, and has spent the last two years writing about cars for Drive, CarAdvice, CarSales and as a motoring columnist for several in-flight and hotel magazines. Susannah’s background is news journalism, followed by several years spent in celebrity journalism, entertainment journalism and fashion magazines and a brief stint hosting a travel TV show for Channel Ten. She joined Drive in 2020 after spending a year and a half at the helm of Harper’s BAZAAR and ELLE’s online platforms. Susannah holds a Bachelor in Media and Communications from the University of Melbourne and cut her teeth as an intern for Time Inc in New York City. She has also completed a television presenting course with the National Institute of Dramatic Art.