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TWITTER’S BOARD OF directors has accepted Elon Musk’s offer to buy the company, ending an era for one San Francisco’s most prominent tech success stories.
Musk, founder of Tesla, Inc. and the world’s wealthiest person, will purchase the social media company in a deal announced Monday and valued at about $44 billion.
Twitter, which has its headquarters in San Francisco, will become a private company following the deal, which is expected to be completed this year.
“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.
“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,” Musk said.
Stockholders will get $54.20 per share of the common stock that they own when the Musk and Twitter complete the transaction. That represents a share price 38 percent higher than the first day of April, when Musk revealed his approximately 9 percent ownership in the company.
Twitter’s board of directors unanimously approved the purchase.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Twitter’s independent Board Chair Bret Taylor said in a statement.
“The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” Taylor said.
Twitter’s share price closed at $51.70 on Monday on the Nasdaq stock exchange, up $2.77 or 5.66 percent above Friday’s closing price.
Too much control?
Some people are concerned about the purchase.
“We should be worried about any powerful central actor, whether it’s a government or any wealthy individual — even if it’s an ACLU member — having so much control over the boundaries of our political speech online,” wrote the American Civil Liberties Union on Twitter Monday after the deal was announced.
The ACLU noted in another tweet, “In today’s world, a small handful of private tech companies — including Twitter — play a profound and unique role in enabling our right to express ourselves online.”
Last week when Musk revealed his offer for Twitter, California State University East Bay professor of communication and history Nolan Higdon said that Musk’s bid is just the latest effort of a corporate oligarch to take over a share of public discourse, which makes “democracy less and less likely to work as it’s designed.”
Higdon cited other “oligarchs” such as News Corp owner Rupert Murdoch, who owns The Wall Street Journal and the New York Post, among other publications, and Amazon’s Jeff Bezos, who owns The Washington Post.
“This is a profit-making opportunity for them and adds to their power,” said Higdon, who also said he is skeptical of Musk’s claim that he is buying Twitter in order to preserve freedom of speech.
Co-founded in 2006 by former CEO Jack Dorsey while he was an undergraduate student at New York University, the original project known as “twttr” was created as a simple messaging service to keep small groups of people connected. Its mainstream popularity grew following its appearance at the 2007 South by Southwest Interactive Conference where usage increased to around 60,000 tweets per day. According to recent figures, that daily number of tweets now tops 500 million.
The site popularized the use of hashtags and trending topics via posts that originally were limited to 140 characters, but by 2017 the maximum length was doubled to 280 characters. Meanwhile, the service continued to evolve and roll out other features that gave users the ability to add photos, streaming video, opinion polls and more. It also began accepting more advertising as a way to monetize the service.
The company has been at the center of numerous controversies over the years, including privacy breaches, abuses by spammers contacting users through direct messages, bots and fake accounts. Attempts to censor inflammatory or misleading content have drawn the ire of liberal and conservative groups alike, and it famously issued a lifetime ban to former President Donald Trump following the Jan. 6, 2021, U.S. Capitol insurrection, arguing that tweets Trump made violated the company’s rules against glorifying violence.
The company made headlines in 2011 when it inked a 10-year lease to move its headquarters to a 1937-era, 11-story office building on Market Street in San Francisco’s Financial District, popularizing a trend of shabby chic among the city’s blossoming tech economy that helped fuel rising rents.
With Musk’s pending purchase, it is unclear what will become of the company’s longtime headquarters. Twitter recently had around 700,000 square feet of leased space, but many of its employees have chosen to work remotely since the start of the COVID-19 pandemic and a shift in corporate policy that allowed such arrangements.