WASHINGTON — Twitter was bought Monday in a $44 billion deal by tech entrepreneur Elon Musk. It's a massive shift for the social media company, which has struggled to gain users and improve profits.
But the relatively quick nature of the deal and its eye-popping sale price have left many with questions.
Here are some of the answers to frequently asked questions about the sale of Twitter:
Who owned Twitter before Elon Musk?
Until Twitter and Musk finalize the deal, the company will remain public, which means not one person or entity “owns” Twitter. Rather, several different people and groups own shares of Twitter.
Before Musk’s takeover, the largest shareholder was the Vanguard Group with a little more than 10% stake, according to CNN Business. Other top institutional investors include Morgan Stanley Investment Management and BlackRock Fund Advisors.
Most of Twitter is owned by private companies and investment groups. Jack Dorsey, the founder of Twitter, was previously Twitter’s largest individual shareholder before Musk invested in the company, owning about 2% of the company's stocks, according to Bloomberg.
What will happen to my Twitter stock?
Once Twitter goes private, it means the public will no longer be able to purchase shares on markets like the New York Stock Exchange. But it’s a bit more nuanced for people that currently own Twitter stock.
Musk had previously said that he would “endeavor to keep as many shareholders in a privatized Twitter as allowed by law.” But is unclear exactly how many shareholders that would mean.
According to NationalWorld, when the deal is finalized, Twitter will offer a “tender offer” to investors to have their share bought out at the price agreed upon between Twitter and Musk. However, NationWorld reports that the majority of investors will receive automatic payouts when the company is privatized, with the money deposited into the account that was used to purchase the stock. Under the agreement Twitter and Musk reached, shareholders will get $54.20 for each share of Twitter stock they own.
Is Twitter a private company now?
Not yet. Musk’s deal still has several layers of red tape to get by, though Twitter is more than likely on track to go through with the buyout plan.
In addition to a final check of books by Musk, regulators like the U.S. Federal Trade Commission and the European Commission must review the deal to make sure no antitrust laws will be broken in the acquisition, a process that could take months.
Finally, shareholders will have a final vote on the buyout – but Twitter has not yet announced when this vote will take place.
Where did Elon Musk get the money to buy Twitter?
It's kind of complicated. Elon Musk, the owner of SpaceX and Tesla, is the richest man in the world, according to Forbes, with a fortune just short of $300 billion. But even with his billions of dollars, Musk needed some help in scraping together $44 billion for the biggest privatization of a public company in decades.
He is reportedly using his own cash for about two-thirds of the purchase price, including $21 billion in cash. Another $12.5 billion in shares of Tesla will be used to secure loans from several banks, including Morgan Stanley and Bank of America.
The remaining money comes from Twitter's own assets. Musk is buying the company in a leveraged buyout (a corporate buyout using mainly loans or bonds). By doing a leveraged buyout, Musk can use the assets of the company he is acquiring as collateral for the remaining loans.
Why did Elon Musk buy Twitter?
Musk, a frequent Twitter user, describes himself as a "free speech absolutist." He has in the past criticized what he views as excessive moderation from Twitter's management team. While his private motives are a mystery, his frequent — and sometimes controversial — tweets have at times fallen into the "not quite illegal" category that he has at times argued to allow.
"If it's a gray area, let the tweet exist," Musk said during an interview at a TED conference.
It's not for the money though. Twitter lags behind other popular sites such as Facebook and Instagram both in users and revenue.
Didn't Musk try to buy Twitter before?
Earlier this year, Elon Musk revealed he had bought a 9.2% stake in Twitter. That much stock earned him a seat on the company's board, although Musk declined it after initially accepting the role.
Shortly after, he floated his first offer to buy Twitter, buying out shareholders at $54.20 per share. In response to the unsolicited bid, they adopted a "poison pill" defense where stock in Twitter would splinter if Musk ever owned more than 15% of the company.
Musk, undeterred, instead put together his "best and final offer" in a bid to take the company private instead and circumvent the poison pill. Monday, the board accepted that second takeover offer, with shareholders getting the same amount per share as in Musk's original offer.
Will Twitter change now that Elon Musk bought it?
Elon Musk says he bought Twitter because it wasn't living up to its free speech principles, and could potentially change some of the platform's disinformation rules.
Most notably, former President Donald Trump was banned from the platform in the wake of the Jan. 6 attack on the Capitol. While Musk hasn't directly addressed Trump's situation, it's possible he could reverse the ban on him and other right-wing figures such as Rep. Marjorie Taylor Greene. But even if he does, Trump has said he won't return to Twitter, and plans to instead use his own Truth Social platform (despite continued problems with the platform since it launched).
Musk has also promised to crack down on bots, publish the site's algorithm as open-source code and possibly even add an edit button to tweets.