Tesla and SpaceX founder and CEO Elon Musk has made an incredible offer to buy one of the world’s biggest social media platforms, Twitter.
The offer comes less than two weeks after Musk paid nearly $3 billion to buy a 9.2 percent share in the controversial company.
According to Bloomberg News:
The world’s richest person will offer $54.20 per share in cash, representing a 54% premium over the Jan. 28 closing price and a valuation of about $43 billion. The social media company’s shares soared 18% in pre-market trading.
Musk, 50, announced the offer in a filing with the U.S. Securities and Exchange Commission on Thursday, after turning down a potential board seat at the company. The billionaire, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4. Tesla shares fell about 1.5% in pre-market trading on the news.
Twitter said that its board would review the proposal and any response would be in the best interests of “all Twitter stockholders.”
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
After Musk’s stock purchase became public, he was offered a seat on the social media giant’s board, but he turned it down. According to the company’s agreement, he would have been limited to purchasing only around 14 percent of Twitter stock.
Musk took to the platform after he bought shares to informally poll users to see what sort of changes they would like to see on a platform where conservatives have often complained censors their point of view while allowing left-leaning content to thrive.
“Unsatisfied with the influence that comes with being Twitter’s largest investor, he has now launched a full takeover, one of the few individuals who can afford it outright. He’s currently worth about $260 billion according to the Bloomberg Billionaires Index, compared with Twitter’s market valuation of about $37 billion,” Bloomberg reported.
In a letter to Twitter’s board, Musk said he believes Twitter “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company.”
The outlet said that it is unlikely the takeover would be a drawn-out affair.
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” Musk said.
Vital Knowledge’s Adam Crisafulli said that Musk’s offer of $54.20 per share is “too low,” given that the company’s stock hit $70 a share a year ago.
“There will be host of questions around financing, regulatory, balancing Musk’s time (Tesla, SpaceX) in the coming days,” added Dan Ives, an analyst at Wedbush. “But ultimately based on this filing it is a now or never bid for Twitter to accept.”
Here’s a portion of Musk’s letter to the Twitter board:
I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.
However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.
As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.
Twitter has extraordinary potential. I will unlock it.