Twitter has announced that it has accepted a bid from Elon Musk to acquire the social media platform, in a sign that it could become more engaged with crypto-assets.
It is now official that Elon Musk is in the process of, quite controversially, acquiring Twitter.
In a transaction valued at $44bn, Twitter will become a privately held company, following the business tycoon’s hostile takeover bid last week.
The transaction, which has been unanimously approved by the Twitter board of directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.
The acquisition could see Twitter more engaged with crypto-assets.
Earlier this month, Musk suggested that Dogecoin could become one of the payment options for the social media platform.
The so-called meme coin, which was created by two software developers in 2013 as a joke payment system, has surged in price since the news.
“DogeCoin is taking off, as he has a weird love affair with that meme coin,” quipped Boyd Cohen, chief executive at blockchain start-up IoMob.
Although DogeCoin still plays on its origins as a joke currency, it does possess certain strengths. For example, the transaction process is more efficient than that of Bitcoin (which is what it was set up to parody).
Dogecoin payments take one minute to confirm, in comparison to the ten-minute wait for bitcoin.
Cohen continued that Twitter has become the de-facto platform for crypto social media. “Many sought to buy out Twitter and turn it into a decentralised autonomous organisation (DAO) governed by the community,” he said.
“This would have been a better outcome for the world, if you ask me,” Cohen suggested.
Others were more enthusiastic about the prospect of the acquisition.
“Elon Musk knows that cryptocurrencies are disrupting value exchange, and he knows that PayPal is being disrupted by Bitcoin,” said Fabio Chesini, a banking and blockchain specialist. “He also knows that Web 3.0 will do for centralised information exchange systems what Bitcoin did for centralised de facto value exchange networks.”
Chesini argued that Jack Dorsey, Twitter’s former chief executive, left the Silicon Valley giant to focus on Bitcoin because he knew he did not have the power for turning Twitter open source.
“This move is brilliant, Musk is following the unbundling and reintermediation pattern we have been witnessing since the internet was invented,” he said, offering his endorsement.
Although crypto enthusiasts such as Chesini believe that the move will be a positive for crypto payments, Musk has a long way to go.
An already suspicious hoard of regulatory authorities and politicians are unlikely to be enthused by the thought of somebody like Musk becoming the owner of one of the world’s largest social media platforms.
Both the UK and the EU are in the process of introducing more stringent laws for online platforms, and it is easy to envisage each jurisdiction's respective authorities being an object of annoyance and/or hindrance for the potential new Twitter owner.
Both jurisdictions, for example, are looking to increase their oversight of crypto-assets, including a prospective EU framework for crypto via the Markets in Crypto Assets Regulation.
Last year, the UK’s financial watchdog chair, Charles Randell, criticised lax rules surrounding the financial promotion of crypto-assets on social media, stating that investors were being unwittingly lured into the crypto space, with very little knowledge of the risks.
Commenting on the acquisition, European Commission internal market chief Thierry Breton tweeted: “Be it cars or social media, any company operating in Europe needs to comply with our rules — regardless of their shareholding. Mr Musk knows this well. He is familiar with European rules on automotive, and will quickly adapt to the Digital Services Act.”
In the US, where regulatory approval for the acquisition will be required, Elon Musk’s relationship with politicians has at times been hostile.
President Joe Biden was critiqued by the tech chief executive after he failed to mention his other company, Tesla, during the State of the Union address.
Musk also tweeted independent senator and former presidential candidate Bernie Sanders, saying “I keep forgetting you’re still alive” after Sanders did a tweet about the country’s wealthiest paying more in tax.
Elizabeth Warren, another leftist senator with whom Musk has had a run-in on Twitter, complained that his acquisition was “dangerous for democracy”.
On the other hand, Republicans appear pleased about the move, with Senate and House representatives, including Lauren Boebert and Marsha Blackburn, having endorsed the move.
Former President Trump once compared Musk to Thomas Edison and called him “one of our great geniuses”.