Elon Musk Targets Twitter With $41 Billion Cash Takeover Bid
“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.”
Elon Musk has offered to buy all of Twitter in a $41 billion cash takeover bid, saying the proposed buyout is part of his plan to bring “free speech around the globe.”
The world’s richest man previously rejected a seat on Twitter’s board of directors after becoming the social media platform’s largest shareholder with a 9.1 percent stake.
“Twitter has extraordinary potential. I will unlock it,” Musk said in a letter to Twitter’s board on Wednesday. The offer was made public in a regulatory filing on Thursday.
The Tesla and SpaceX boss put in a $41 billion cash bid to purchase 100 percent of Twitter at $54.20 per share. According to the New York Post, the offer represents a 38 percent premium over Twitter’s April 1 market close, which was the last trading day before Musk’s 9.1 percent shareholding was made public.
Twitter’s valuation had climbed to $47.37 per share by Thursday morning, cutting the premium of Musk’s offer to around 13.5 percent.
“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 wrote in a letter to Twitter Chairman Bret Taylor.
“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.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.”
The massive takeover bid comes after Musk had criticized the company through suggestions ranging from a joke about Twitter dropping the “w” from its name to the implementation of an “edit” button and the abandonment of its ad-based business model. He also suggested converting Twitter’s San Francisco headquarters into a homeless shelter.
Musk didn’t mince words in a Thursday securities filing, telling the Twitter board, “I am not playing the back-and-forth game.”
“I have moved straight to the end,” the billionaire entrepreneur said. “It’s a high price and your shareholders will love it.”
Last month, Musk publicly trashed the company, calling it “the de facto public town square,” for “failing to adhere to free speech principles fundamentally undermines democracy” and teased the idea of launching his own social media platform.
“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” Musk asked users in a Twitter poll on March 28, in which over 70 percent of the 2 million voters responded “No.”
Musk — the richest person in the world with a fortune of more than $265 billion, according to Forbes — bought 73.5 million shares of the company, worth an estimated $2.89 billion, according to an SEC filing.
Reuters reports that Twitter has acquired fewer users than expected in recent months, raising doubts about its growth potential.
“The big question for the Twitter board now is whether to accept a very generous offer for a business that has been a serial underperformer and tends to treat its users with indifference,” Michael Hewson, Chief Market analyst at CMC Markets, said after the announcement of Musk’s offer, per Reuters.
Musk has built up more than 80 million followers since joining Twitter in 2009 and has used it to make several announcements, including teasing a go-private deal for Tesla at a weed-referencing $420-per-share that landed him in hot water with regulators.
Musk has also been sued by former Twitter shareholders who claim they missed out on the recent run-up in its stock price because he waited too long to disclose his stake.