Elon Musk and Twitter Have a Deal

Musk has already floated ideas for changes he wants to make at Twitter.

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Photo illustration with Elon Musk's profile on Twitter
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Elon Musk is on the brink of taking over Twitter.

Musk and the board of the influential social network have agreed to a deal that values the company at about $44 billion, Twitter said in a press release Monday. Musk will pay shareholders $54.20 per share, representing a 38% premium on Twitter's closing stock price on April 1, when the tech mogul disclosed a 9% stake in the company. Musk is one of Twitter's largest shareholders.

Watch this: Elon Musk Is Buying Twitter. Here's What Could Change

The entrepreneur, who already runs Tesla, SpaceX and other companies, made his unsolicited offer to buy the company earlier this month. While Twitter was initially expected to reject the offer, the company reportedly warmed to the idea after Musk revealed his financing plan for the bid, which included backing from investment bank Morgan Stanley.

The deal, which was unanimously approved by the Twitter board of directors, is expected to close later this year. It still needs to be approved by Twitter shareholders.

The agreement caps a tumultuous relationship between Musk and Twitter, and raises questions about the trajectory of the social network. Twitter has struggled in the past to grow both its user base and ad sales as it competed with bigger companies, such as Facebook and Google. Twitter set a goal to reach $7.5 billion in revenue and 315 million users by 2023. The company reported having 217 million daily users who see ads in the fourth quarter of 2021.

Musk, who has 83 million followers, is an avid user of Twitter but also one of its loudest critics. He has publicly raised questions about how Twitter moderates content, repeatedly polling his followers about changes that could be made at the company. 

"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. Twitter has tremendous potential -- I look forward to working with the company and the community of users to unlock it."

Twitter has ground rules that it uses to determine what it allows users to say on its service. The rules include a ban on election and COVID misinformation. The service has banned some users, including former President Donald Trump, for inciting violence. 

Twitter has been a flash point in the conversation about the bounds of free expression on private platforms. The company has fought misinformation about elections, COVID and other topics. Its decisions have prompted assertions on the right that it censors conservative views and on the left that it promotes hate speech. Trump, who was known for hurling insults in Twitter's 280-character blasts, was often at the center of the platform's controversies. 

Private companies are allowed to set their own rules about what is and isn't allowed on their platforms. The US Constitution's First Amendment guarantee of freedom of speech prevents the government from censoring speech but doesn't apply to private companies such as Twitter.

In addition to loosening moderation, Musk has suggested Twitter combat cryptocurrency scams, open source its algorithm and release a tweet-editing feature.

Twitter CEO Parag Agrawal, who had remained silent on social media about Musk's takeover attempt, tweeted Monday that the company "has a purpose and relevance that impacts the entire world." He added that he is "deeply proud of our teams and inspired by the work that has never been more important."

Bret Taylor, the chair of the company's board, indicated financing Musk secured for the deal ultimately helped sway directors' opinions. 

The board reviewed Musk's proposal with "a deliberate focus on value, certainty, and financing," Taylor said in the press release. "We believe it is the best path forward for Twitter's stockholders."

Correction, April 26: An earlier version of this story misstated Twitter's daily users. The company reported having 217 million daily users who see ads in the fourth quarter of 2021.