There's a new boss in social media.
Elon Musk, the CEO of the world's premier electric vehicles company with a net worth north of $265 billion, will now add Twitter Inc (NYSE:TWTR) to his portfolio.
What To Know: On Monday, Twitter accepted Musk's offer to purchase the company for $54.20 per share.
The Telsa Inc (NASDAQ:TSLA) chief first made an offer on April 14, just days after becoming the social media company's largest shareholder.
"I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy," Musk said in a filing at the time.
"However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company."
Several regulatory hurdles remain before the deal becomes official.
In a Monday press release, Musk said he wants 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 has tremendous potential – I look forward to working with the company and the community of users to unlock it."
Why It's Important: Musk is the world's richest man, thanks in large part to the massive valuation of Tesla. He is also the founder and CEO of SpaceX, the founder of The Boring Company and co-founder of Neuralink and OpenAI.
He has developed a cult-like following over the years, due in large part to his industry-changing companies, as well as his public accessibility on the Twitter platform.
Many cheered for Musk's offer to be accepted, citing Twitter's languishing share price and its alleged suppression of speech.
“I hope that even my worst critics remain on Twitter because that is what free speech means,” Musk said in a Monday tweet.
Others have been more direct about why this is important from a business standpoint.
“[Twitter] has done an abysmal job of creating value for shareholders, all the while multiple management teams rotating through issuing themselves options,” investor and "Shark Tank" star Kevin O’Leary recently told CoinDesk. “I applaud Elon Musk to go in there, fire everybody, and reboot the company. That’s what’s needed.”
TWTR Price Action: Twitter shares trade around $51.60 at press time. Shares have moved up from the $45 level at which they were trading around the time Musk's offer first came to light.
The stock is down 22% over the last year, not too far removed from its 2013 debut price of $41.65. Twitter has a 52-week high of $73.34 and a 52-week low of $31.30.
Photo: Courtesy of Thomas Hawk on Flickr.
