Twitter confirms sale of company to Tesla's Musk for $44bln

Elon Musk, the world’s richest man, struck a deal Monday to buy Twitter for $44 billion, capping a saga complete with hostile takeover threats before delivering him personal control of one of the most influential social media platforms on the planet.

Twitter famously served as a megaphone for former US president Donald Trump before the platform banned him, and Musk—a self-proclaimed “free-speech absolutist”—has said he wants to reform what he sees as the platform’s over-zealous content moderation.

“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 released by Twitter.

“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.”

Twitter shares were up more than 5% in the afternoon on reports the company is nearing the  deal with Elon Musk that could be announced as soon as Monday.

The company’s stock crept higher after the Wall Street Journal reported the deal was expected after market close, if not sooner.

Musk earlier this month offered to buy Twitter for $54.20 a share, or about $43 billion. The social media company had been expected to decline a deal and had adopted a so-called poison pill to fend off a potential hostile takeover. However, Twitter became more receptive to a bid after Musk revealed he secured $46.5 billion in financing.

The company’s board met Sunday to discuss Musk’s financing plan for his proposed bid, a source close to the situation told CNBC.

Bloomberg and Reuters reported the two sides could reach an agreement as soon as Monday. The board negotiated with Musk into the early hours of Monday, according to The New York Times.

It’s unclear what a final deal could look like, and Reuters reported Monday that an agreement could still fall apart. Twitter has not been able to secure a “go-shop” agreement yet, which would allow it to look for other bids once it signs an accord, according to Reuters. The company could still accept another bid if Musk pays a break-up fee, it added.

Wall Street was likely to view the news of Twitter’s openness to a bid “as the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix,” Wedbush analyst Dan Ives said in a Sunday note.

“I think they almost have to” take the deal, CNBC’s Jim Cramer said Monday on “Squawk on the Street.” Twitter is set to report first-quarter earnings Thursday, and some, including Cramer, expect the company to post disappointing results.

“Locking a deal up today or tomorrow may sound pretty appealing for someone who knows they are in possession of bad news,” Gordon Haskett said in a Monday note.

Twitter declined to comment. Tesla shares were down around 1% in the early afternoon.

The Tesla and SpaceX CEO has been on a tear to acquire Twitter. He had built up more than 9% in stock and turned down an offer to join the board before putting in a bid for the company.

Musk, an avid Twitter user, has contended it needs to be “transformed” into a private company so it can become a forum for free speech. He’s also said that Twitter’s board members’ interests “are simply not aligned with shareholders” and that the board “owns almost no shares” of the company.

SOURCE: CNBC/AFP