Elon Musk's Twitter acquisition is approved - what does it mean?

Twitter's board has agreed to Elon Musk's proposal to buy the company for $44 billion.

Twitter will become a privately owned firm after the acquisition is completed, which could mean big changes for the platform.

"The Twitter Board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing," said Bret Taylor, Twitter's independent board chair.

The board directors say the proposed deal will provide a significant cash premium to the firm's investors and is "the best path forward" for them.

In a joint statement with Twitter, Musk said he wants to enhance the site with new features, while eliminating automated spam accounts and opening the platform's algorithms up to the public to increase trust.

"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," he said.

The agreement was reached just two weeks after the billionaire announced he had a nine per cent stake in the company.

Musk stated last week that he had secured $46.5 billion in funding to purchase Twitter, putting pressure on the board of directors to reach an agreement.

The deal, which was unanimously authorised by the board, is likely to conclude in 2022, assuming regulatory and shareholder approval. As Musk isn't buying a competitor, and shareholders stand to make a lot of money, there's no reason to think these steps will present obstacles.

Discussions over the proposed deal, which appeared doubtful last week, accelerated on Sunday after Musk enticed Twitter shareholders with financing details of his bid.

The company then began negotiating with Musk to acquire the firm at his proposed $54.20 per share price.

The purchase price represents a 38 per cent premium over Twitter's closing stock price on 1st April, the day before Musk announced his purchase of more than nine per cent of the company's shares.

Nonetheless, the offer is lower than the $70 level at which Twitter was trading last year.

Musk has said that he was not primarily concerned about Twitter's economics.

The move comes as lawmakers and authorities have put increasing pressure on Twitter over the content that appears on its site. The firm's efforts to mediate disinformation have garnered criticism from both the left and the right.

Last year, the platform banned former US President Donald Trump in one of its most high-profile measures, citing the possibility of "incitement of violence."

Elon Musk is a regular Twitter user, with more than 80 million followers. He has said in the past that Twitter is harming democracy by not sticking to free speech ideals, and that it must be taken private in order to grow and become a free speech platform.

Musk stated on Monday that he views Twitter as an important forum for debate.

"I hope that even my worst critics remain on Twitter, because that is what free speech means," he said just hours before the Twitter board announced deal with Musk.

Computing says:

As a public company, Twitter has shareholders who are protected by the US Securities and Exchange Commission (SEC). This is the same department that has taken Musk to task several times for statements - often on Twitter - that have affected Tesla's stock price.

However, private companies don't have that kind of protection; they're run to the whims of their owners. Musk could say whatever he wants about Twitter in the future, and no-one will be able to hold him to account for it.

No-one, that is, except the banks who are financing a large part of the deal. To meet that massive debt, Twitter is going to need to generate revenue - a lot more than it does today, and that likely means big changes for the platform.

For example, it's likely that Musk/Twitter will expand Twitter's advertising model, and court controversial users like Donald Trump to drive engagement and serve more ads. Trump has previously said he wouldn't return to Twitter, preferring to stick to his own Truth Social safe space, but the fact is he could reach many more users on Twitter than his miniscule and bug-laden far-right platform.

There will also be heated battles with regulators in the EU and USA, who for some time have been trying to clamp down on the Wild West of social media disinformation. Expect fireworks.

Finally, if Twitter's redesign does end up driving people away (several celebrities have already resigned in disgust), the time could be ripe for a competitor from another tech giant - possibly Google, which has wanted a slice of the social media pie for a long time.