The on-again off-again relationship between Elon Musk and Twitter took a new twist on Thursday as the world's richest man made a hostile bid to buy up the whole company for more than $43 billion US.
In a regulatory filing, Twitter revealed that Musk has offered to buy up all outstanding shares in the company for $54.20 US a share. With 800 million shares out there, that values the company at just over $43 billion US.
It's the latest development in the month-long saga between Musk and the company, after it emerged in early April that Musk had quietly bought up more than 73 million shares in the company — more than any other single person or entity owns.
That led to him being invited to join the company's board of directors, before that overture fell apart days later.
WATCH | Musk's stake in Twitter raises questions about his plans:
In a tweet, Musk called his hostile takeover offer his "best and final price" for the company, and laid out a bit of his rationale.
"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," Musk said in the filing. "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."
I made an offer <a href="https://t.co/VvreuPMeLu">https://t.co/VvreuPMeLu</a>
—@elonmuskTwitter's board acknowledged receipt of the offer and is said to be meeting on Thursday to discuss whether or not to accept or continue to operate as a publicly traded company. U.S. financial news channel CNBC is reporting that there's an all-staff meeting for Twitter employees at 5 p.m. ET Thursday to discuss the development.
Musk spoke at a TED talk in Vancouver on Thursday where he was asked about his motivations. He made it clear that his reasons for wanting to take the company private are more rooted in wanting to preserve free speech in what he calls the "public square" than financial ones.
"This is not a way to make money ... I don't care about the economics at all," he said.
"This is just my strong intuitive sense ... that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization."
What happens next
Analyst Daniel Ives of Wedbush told CBC News in an email that he thinks it could take between 30 and 45 days for the process to sort itself out but ultimately he thinks Musk will be successful.
"This soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company." He thinks it would be hard for any other bidders or consortium to come forward and said Twitter's board will likely be forced to accept Musk's offer or start a process to sell the company.
Market reaction to the offer tells a slightly different story. While up in premarket trading, Twitter shares were changing hands on Thursday at roughly $46 a share. That's a sign investors don't think the deal will go through as described, and they aren't putting their money where Musk's mouth is.
"Investors are not expecting another offer or a bidding war," said Colin Cieszynski, a strategist at SIA Wealth Management in Toronto.
Saudi Prince Al Waleed bin Talal Al Saud, another major Twitter shareholder, has come out against the deal, noting that the price offered doesn't "come close to the intrinsic value of Twitter given its growth prospects."
I don't believe that the proposed offer by <a href="https://twitter.com/elonmusk?ref_src=twsrc%5Etfw">@elonmusk</a> ($54.20) comes close to the intrinsic value of <a href="https://twitter.com/Twitter?ref_src=twsrc%5Etfw">@Twitter</a> given its growth prospects. <br><br>Being one of the largest & long-term shareholders of Twitter, <a href="https://twitter.com/Kingdom_KHC?ref_src=twsrc%5Etfw">@Kingdom_KHC</a> & I reject this offer.<a href="https://t.co/Jty05oJUTk">https://t.co/Jty05oJUTk</a> <a href="https://t.co/XpNHUAL6UX">pic.twitter.com/XpNHUAL6UX</a>
—@Alwaleed_TalalThrough his personal holdings and influence on Saudi Arabia's national investment fund, the prince says he will soon control more than five per cent of Twitter shares, and has no interest in selling them to Musk.
Other analysts think the story is far from over. "Musk's 'best and final' $43 billion non-binding offer has numerous conditions, including completion of financing, which we believe give it a low probability of success," Bloomberg Intelligence credit analyst Robert Schiffman said. But, "well-capitalized, white-knight suitors could emerge."
The billionaire has been a vocal critic of Twitter in recent weeks, mostly over his belief that it falls short on free speech principles. The social media platform has angered followers of Donald Trump and other far-right political figures who've had their accounts suspended for violating its content standards on violence, hate or harmful misinformation. Musk also has a history of his own tweets causing legal problems.
Huge following
Musk's 81 million Twitter followers make him one of the most popular figures on the platform, rivaling pop stars like Ariana Grande and Lady Gaga. But his prolific tweeting has sometimes gotten him into trouble with the SEC and others.
Musk and Tesla in 2018 agreed to pay $40 million in civil fines and for Musk to have his tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at $420 per share. That didn't happen, but the tweet caused Tesla's stock price to jump. Musk's latest trouble with the SEC could be his delay in notifying regulators of his growing stake in Twitter.
Musk has described himself as a "free speech absolutist" and has said he doesn't think Twitter is living up to free speech principles — an opinion shared by followers of Donald Trump and a number of other right-wing political figures who've had their accounts suspended for violating Twitter content rules.
https://news.google.com/__i/rss/rd/articles/CBMiPGh0dHBzOi8vd3d3LmNiYy5jYS9uZXdzL2J1c2luZXNzL2Vsb24tbXVzay10d2l0dGVyLTEuNjQxOTUyM9IBAA?oc=5
2022-04-14 17:42:41Z
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