Elon Musk says Twitter will stay free for casual users
Elon Musk says Twitter will ‘always be free for casual users, but maybe a slight cost for commercial/government users’ as he tells investors he plans to take it public again within three years’ of $44 billion buyout
- On Tuesday Elon Musk tweeted: Twitter will always be free for casual users, but maybe a slight cost for commercial/government users,’
- Possibly charging commercial or government users is the latest suggested change to the social media app Musk has mused about publicly
- Before reaching a deal Musk suggested lowering the price of the Twitter Blue premium subscription service
- Musk has also tweeted about potentially monetizing tweets, although he has not provided specific details
- Musk was reported by The Wall Street Journal to be telling potential investors he will take the company public again, in as little as three years
Elon Musk, pictured on Monday at the Met Gala, has reportedly told potential investors that he may take Twitter public again after as little as three years
After telling investors he plans to take Twitter public again within three years Elon Musk assured his followers that the social media site will remain free for most users.
Following a report on Tuesday that Musk, 50, was planning on running Twitter as a private company for only three years before returning the company to public ownership, Elon Musk continued with his perplexing musings on the social media site.
First tweeting: ‘Ultimately, the downfall of the Freemasons was giving away their stonecutting services for nothing.’
That was followed up by a tweet that said: ‘Twitter will always be free for casual users, but maybe a slight cost for commercial/government users.’
Possibly charging commercial or government users is the latest suggested change to the social media app Musk has mused about publicly.
Before reaching a deal Musk suggested lowering the price of the Twitter Blue premium subscription service.
Musk has also tweeted about potentially monetizing tweets, although he has not provided specific details.
On April 25 Musk reached an agreement with Twitter’s board to buy the company for $44 billion.
The South African-born billion has said he is motivated primarily by a wish to restore Twitter as a place for the free exchange of ideas, and has repeatedly said he wants to move away from ‘censorship’ and err on the side of free speech.
His critics fear that this will result in an explosion of hate speech.
Musk, who calls himself a free speech absolutist, has criticized Twitter’s moderation policies.
He wants Twitter’s algorithm for prioritizing tweets to be public, and objects to giving too much power on the service to corporations that advertise.
On Monday, at the Met Gala – his first public appearance since the deal was agreed – he was asked about his plans for Twitter.
‘My goal, assuming everything gets done, is to make Twitter as inclusive as possible and to have as broad a swathe of people on Twitter as possible,’ he said.
‘And that it is entertaining and funny and they have as much fun as possible.’
On Tuesday Elon Musk tweeted: Twitter will always be free for casual users, but maybe a slight cost for commercial/government users’
Twitter’s logo is seen on November 7, 2013, outside the New York Stock Exchange on the first day of trading. Shares closed at $44.90 on the first day. They are now worth $48.87
Since the deal he has been talking to investors in a bid to reduce the $21 billion he needs to come up with to close the deal.
The remainder of the money will come from bank loans.
Musk, the world’s richest man, is worth $255 billion – but much of that money is tied up in Tesla stock. He is believed to have ‘only’ $3 billion in cash, Bloomberg reported last month.
Musk’s indication that he is considering a plan to return the company to public ownership may be designed to reassure potential investors, and indicate that he would act quickly to make the company profitable.
Private equity firms often take companies private, with the intention of increasing their profitability and ironing out issues outside of the spotlight, and then taking them public again within five years or so.
On April 14, he said he was not interested in the company for money, and was more concerned about changing the way it operates.
‘This is not a sort of way to make money,’ he said. ‘I don’t care about the economics at all.’
Last week, Musk disclosed he sold $8.5 billion worth of Tesla stock following his agreement to buy Twitter.
The new financing, which could come in the form of preferred or common equity, could reduce the $21 billion cash contribution that Musk has committed to the deal as well as a margin loan he secured against his Tesla shares, sources told Reuters.
The banks that agreed last month to provide $13 billion in loans based on Twitter’s business balked at offering more debt for Musk’s acquisition given the San Francisco-based company’s limited cash flow, Reuters reported last month.
Musk has also pledged some of his Tesla shares to banks to arrange a $12.5 billion margin loan to help fund the deal.
Investors have been fretting over whether Musk will complete the Twitter deal given that he has backtracked in the past.
In April, he decided at the last minute not to take up a seat on Twitter’s board.
In 2018, Musk tweeted that there was ‘funding secured’ for a $72 billion deal to take Tesla private but did not move ahead with an offer.
Musk has already floated some ideas about how to make Twitter more profitable.
He said that he intends on reducing the pay for executives and board members – Twitter’s 11 board members collectively make $2.9 million in cash and stock awards, and Musk has said he will reduce that to zero.
Twitter’s top lawyer, Vijaya Gadde, earned $17 million last year, although the vast majority of that was stock. CEO Parag Agrawal receives an annual salary of $1 million, but made around $30 million last year when his stock was taken into account.
The Tesla magnate, 50, agreed to pay shareholders $54.20 in cash for each share of common stock before the bombshell deal was struck
Twitter CEO Parag Agrawal (left) and co-founder Jack Dorsey (right) also hold board seats
Twitter’s board members made an average of nearly $290,000 in director compensation for 2021, filings show – a figure that is not considered excessive in Silicon Valley.
Members of the board of Alphabet – Google’s parent company – made between $400,000 and $500,000, while those sitting on the board of Meta, Facebook’s parent company, made an average of nearly $800,000 in total compensation.
Twitter shares ended trading up 0.55 percent at $48.87 in New York on Tuesday.
Musk would have to pay a $1 billion termination fee to Twitter if he walked away, and the social media company could also sue him to complete the deal.
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