Elon Musk acquires Twitter for $44bn

World’s richest man, Elon Musk, early Tuesday, announced that he has succeeded in purchasing the social media platform Twitter at last.

Twitter’s Board of Directors was initially reluctant to accept the Tesla CEO’s bid and even enacted a shareholders’ rights plan known as a ‘poison pill’ to protect the company from what it deemed a hostile takeover.

However, earlier this week, reports emerged that Twitter executives had begun warming up to discussing the deal that culminated in the board accepting Musk’s $44 billion offer to take the firm private.

Announcing his purchase of Twitter, Musk issued the following statement: “Qualify for a better job in weeks instead of years, with skills-based training & certification courses at Unmudl today!

“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. 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 pitched the takeover bid for Twitter earlier this month at $54.20 per share, shortly after he bought a 9.2% share of the platform on April 4. Twitter shares at the time were trading below $40 per share.

Twitter shares have jumped by over 35% since Musk announced his acquisition plans. They were trading above $52 per share in early trading on Monday.

A regular on Twitter with over 81.5 million followers, Musk is notorious for his tweets, some of which have landed him in legal hot water.

In fact, his move to buy Twitter came shortly after US regulators announced they have authority to subpoena the Tesla CEO about his tweets and urged a federal judge not to let him tweet without supervision.

This prompted Musk to tweet that he is ‘giving serious thought’ to building his own social media platform. He made his bid for Twitter 20 days later.

Commenting to the acquisition of the company he co-founded, Jack Dorsey said: “I love Twitter. Twitter is the closest thing we have to a global consciousness,” he wrote.

After stepping down from Twitter in November 2021, Dorsey continued to sit on the company’s board of directors. The board approved Musk’s $44 billion acquisition

“The idea and service is all that matters to me, and I will do whatever it takes to protect both. 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,” his Twitter thread continued.

“In principle, I don’t believe anyone should own or run Twitter. It wants to be a public good at a protocol level, not a company. Solving for the problem of it being a company however, Elon is the singular solution I trust. I trust his mission to extend the light of consciousness,” Dorsey wrote.

“Elon’s goal of creating a platform that is “maximally trusted and broadly inclusive” is the right one. This is also @paraga’s goal, and why I chose him. Thank you both for getting the company out of an impossible situation. This is the right path…I believe it with all my heart.

“I’m so happy Twitter will continue to serve the public conversation. Around the world, and into the stars!,” Dorsey wrote.

Dorsey is currently chairperson and “Block Head” of Block, parent company of Square and Tidal. The Radiohead song from the group’s classic “Kid A” album was tweeted with a Tidal link. Commenters remarked that despite the soothing title, the song was an odd choice due to its downbeat lyrics.

As at Monday, Jack Dorsey had a net worth of $7 billion. A few hours later Elon Musk officially struck a deal to buy the company Jack co-founded, Twitter, for $44 billion.

According to Twitter’s most recent SEC filings, before the Elon buyout Jack Dorsey owned approximately 18 million shares of Twitter. In other words, Jack only owned about 2% of Twitter’s total outstanding shares… aka 2% of the company as a whole.

At the buyout price of $54.20 per share, Jack will receive approximately $975 million in cash from Elon (technically, from a consortium of banks loaning money to Elon using his Tesla shares as collateral).

Jack’s windfall will be trimmed when he pays 13% to the state of California and 20% to the IRS. By my count, Jack’s net gain on this deal after taxes will be around…

$653 million

Obviously, that’s an absolutely enormous amount of money that would make Jack Dorsey the richest person in most rooms he enters, but it is interesting how little of the company, a company his name and face defined for a decade, he actually owned.

Jack Dorsey is actually a billionaire thanks to the other companies he co-founded, payment processing company Square, which was recently re-named Block.

As of this writing Jack Dorsey owns around 43 million shares of Block. Block closed today at $107 per share. So Jack’s 43 million shares are worth $4.6 billion.

Jack also controls around $1 billion worth of cash and other investments.