Elon Musk buys Twitter for $61.4 billion, sends value of Donald Trump-linked company down

Donald Trump says he won’t return to Twitter after news broke of Elon Musk’s shock deal - but it wasn’t enough to stop his stocks plummeting.

Elon Musk’s purchase of Twitter for $61.4 billion ($US44 billion) has seen the value of a company linked to Donald Trump’s new social platform plummet despite the president saying he would not return to tweeting.

Shares of Digital World Acquisition Corporation, which is set to merge with Trump Media & Technology Group, fell 13 per cent on Monday — the lowest level since its deal with the former president was announced last October, CNN reports.

The drop came as Mr Musk, who has plans to reform what he sees as Twitter’s overzealous content moderation, reached a deal to take over the social media giant.

The deal is a blow to Trump Media & Technology Group, which recently launched Truth Social, a Twitter-like platform aimed at conservatives which the former president says have been silenced.

Twitter famously served as a megaphone for Mr Trump before the platform banned him once he lost the presidency.

“There’s no need to download Truth Social if you can get it on Twitter,” said Matthew Kennedy, senior IPO market strategist at Renaissance Capital, told CNN.

However, Mr Trump says he will not return to Twitter even if his ban is overturned.

“I am not going on Twitter, I am going to stay on TRUTH,” Mr Trump told Fox News.

“I hope Elon buys Twitter because he’ll make improvements to it and he is a good man, but I am going to be staying on TRUTH.”

Mr Trump told Fox News he will begin “TRUTHing” over the next week.

Meanwhile, news of the Musk deal saw Twitter’s share price surge.

Donald Trump says he won’t return to Twitter despite it being sold to Elon Musk. Picture: Saul Loeb/AFP

The deal caps a saga that began with hostile takeover threats and delivered Mr Musk personal control of one of the most influential social media platforms on the planet.

Mr Musk, a self-proclaimed “free-speech absolutist” and the world’s richest man, said he wants to make Twitter better.

“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.”

The company’s CEO Parag Agrawal said in a tweet: “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”

I hope that even my worst critics remain on Twitter, because that is what free speech means

— Elon Musk (@elonmusk) April 25, 2022

🚀💫♥️ Yesss!!! ♥️💫🚀 pic.twitter.com/0T9HzUHuh6

— Elon Musk (@elonmusk) April 25, 2022

The publicly traded firm will now become a private company owned by Musk, who negotiated a purchase price of $75.55 per-share (US$54.20), Twitter said.

Twitter’s stock price surged as the deal was confirmed, rising 5.66 per cent to $71.98 (US$51.70) at 5.15am AEST today.

Earlier, trading in Twitter’s shares was halted as reports filtered through of a takeover.

Musk last week lined up around $64.80 billion (US$46.5 billion) in financing to make the purchase happen, and Dan Ives, an analyst at Wedbush Securities, predicted earlier in the day that since the board could not find another buyer, it would likely accept his offer.

“This basically put (their) back against the wall, they had to come to the negotiation table,” he said in an interview on CNBC.

SpaceX owner and Tesla CEO Elon Musk. Picture: Britta Pedersen // AFP

Trump to return?

Musk, who has complained of overzealous moderation on the platform, bought a nine-percent stake in Twitter earlier in April, then offered to buy the whole company outright, citing a mission of preserving free speech.

While the firm’s board initially said it was reviewing his offer, it later rebuffed him and adopted a “poison pill” plan that would have made it harder for Musk to acquire a controlling position.

Last week, Musk — whose immense wealth stems from the popularity of Tesla electric vehicles as well as other ventures — said he had lined up financing.

Despite Musk’s wealth, the question of financing had been seen as a potential stumbling block because much of his holdings are in Tesla shares rather than cash.

In a filing, Musk had pointed to a $18.12 billion (US$13 billion) debt facility from a financing consortium led by Morgan Stanley, a separate $17.42 billion (US$12.5 billion) margin loan from the same bank, as well as $29 billion (US$21 billion) from his personal fortune as being behind the deal.

Elon Musk is set to buy Twitter. Kirill KUDRYAVTSEV / AFP

Musk’s efforts have raised hopes about the commercial potential of Twitter, which has struggled to achieve profitable growth despite its influential spot in culture and politics.

Under Agrawal, who took over as Twitter CEO late last year, the company has made progress on new monetisation features, such as subscription products, Truist securities said in a note, adding that “short term, Musk’s involvement at this stage runs the risk of disrupting those efforts.” But the polarising Tesla chief’s campaign has also sparked concern among technology and free-speech experts who point to Musk’s unpredictable statements and history of bullying critics, which contradict his stated aims.

Progressive group Media Matters for America warned that Trump, who was banned from Twitter after last year’s assault on the US Capitol by his supporters seeking to overturn the 2020 presidential election result, could return if Musk’s purchase goes through.

“Any negotiations to sell Twitter to Musk must include clear enforceable mechanisms to uphold and maintain existing community standards, including the removal of those who violate those standards,” the group’s president Angelo Carusone said in a statement.

- With AFP