The richest man in the world, Elon Musk, clinched a deal to buy Twitter Inc (TWTR.N) for $44 billion cash on Monday.
Political activists expect that a Musk regime will mean less moderation and reinstatement of banned individuals including former President Donald Trump but some human rights activists voiced fears of a rise in hate speech.
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
Under pressure, Twitter started negotiating with Musk to buy the company at his proposed $54.20 per share price. Musk said in a statement:
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.
Former Twitter CEO Jack Dorsey weighed in on the deal late on Monday with a series of tweets that thanked both Musk and current Twitter CEO Parag Agrawal for “getting the company out of an impossible situation.” He said:
Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step.
Twitter shares rose 5.7% on Monday to finish at $51.70. The deal represents a near 40% premium to the closing price the day before Musk disclosed he had bought a more than 9% stake.
Even so, the offer is well below the $70 range where Twitter was trading last year.
Jonathan Boyar, managing director at Boyar Value Group which holds a stake in Twitter said:
I think if the company were given enough time to transform, we would have made substantially more than what Musk is currently offering.
If the public markets do not properly value a company, an acquirer eventually will.
Twitter said Musk secured $25.5 billion of debt and margin loan financing and is providing a $21 billion equity commitment.
Musk, who is worth $268 billion according to Forbes, is chief executive of both electric car maker Tesla Inc (TSLA.O) and aerospace company SpaceX, and it is not clear how much time he will devote to Twitter or what he will do.
The Twitter transaction was approved by the company’s board and is now subject to a shareholder vote. No regulatory hurdles are expected, analysts said.