Elon Musk strikes deal to buy Twitter for $44bn

Tesla CEO Elon Musk stands to be the next owner of Twitter, having pledged roughly $44bn to buy the social media platform.

Musk, a self-described “free-speech absolutist”, has promised to develop new features including “authenticating all humans”, as he described it in a statement quoted in a press release announcing the acquisition on Monday.

It is unclear how Elon Musk intends to make money from the platform, but he has suggested in interviews and tweets that he intends to loosen the restrictions around what can be said on Twitter.

 The richest man in the world, has frequently expressed concerns that Twitter’s control of free speech goes too far – despite it being one of the least policed social media platforms.

He has also promised to make Twitter’s algorithms public so users can see how content is promoted or demoted, and rid the platform of spam bots that interfere with the user experience.

So far, the question of whether Donald Trump, and others who have been banned or suspended from the site, will be allowed back has gone unanswered, both by Eloin Musk and by Twitter executives.

Can Musk turn Twitter around?

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.

Twitter shares on Monday closed more than 5% higher after the deal was announced.

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

Musk 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.

Tackling cryptocurrency scams

Musk said a top priority would be eliminating “the spam and scam bots and the bot armies that are on Twitter”.

The proposed solution is to authenticate “all real humans” or to have accounts overtly linked to other personal identifiers, whether it be a phone number, an email address or a photo. Dogecoin’s co-founder Billy Markus has complained to Twitter’s support team about the platform being flooded with the giveaway crypto scams, where fake Twitter handles impersonate famous personalities in the crypto market or influential celebrities.

The price of Dogecoin shares popped following news of Twitter’s buyout deal with Musk, who has been a proponent of the cryptocurrency and has gone so far as to call himself the “Dogefather”.

 

 

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by Styliana Charalambous Head of Market Research