Tesla CEO Elon Musk on Thursday offered to buy Twitter for around $43 billion, saying that he believes “free speech is a societal imperative for a functioning democracy.” Musk, currently the company’s biggest shareholder, offered to buy the remaining shares of Twitter for $54.20 per share, in an apparent jokey reference to the number 420, a slang term for marijuana.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
In a message to Twitter board chair Bret Taylor, Musk said that since making his investment, he’s realized “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.
Musk, the richest man in the world with more than 81 million Twitter followers, said it was his best and final offer, although the offer is non-binding and subject to financing and other conditions.
“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.”
“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 in a voice script from either a voicemail Musk left for Taylor, or from a phone call between Musk and Taylor.
Twitter shares jumped 5.6 percent at the opening bell on Thursday, to $48.40. But because the stock remains 11 percent below Musk’s offer price, analysts say investors do not view his takeover of the company as inevitable.
Twitter said in response that it will have to decide whether Musk’s offer is in the best interests of its shareholders, or if it would be better if they continued to operate as a publicly traded company.
Twitter’s board reportedly met this morning at 10:00 AM ET to discuss Musk’s takeover offer.
Analyst Daniel Ives of Wedbush said Thursday that he believes “this soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company. It would be hard for any other bidders/consortium to emerge at this price level.”
Musk has been been buying Twitter shares in almost daily batches starting Jan. 31, ending up with a stake of about 9 percent,” Breitbart reported.
A lawsuit filed Tuesday in New York federal court alleged that Musk illegally delayed disclosing his stake in the social media company so he could buy more shares at lower prices.
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 has described himself as a “free speech absolutist” but is also known for blocking other Twitter users who question or disagree with him.
After Musk announced his stake, Twitter quickly offered him a seat on its board on the condition that he not own more than 14.9% of the company’s outstanding stock, according to a filing. But the company said five days later that he’d declined.
He didn’t explain why, but the decision coincided with a barrage of now-deleted tweets from Musk proposing major changes to the company, such as dropping ads — its chief source of revenue — and transforming its San Francisco headquarters into a homeless shelter.
Twitter hasn’t done as well as its social media rivals and lost money last year. The company reported a net loss of $221 million for 2021 largely tied to the settlement of a lawsuit by shareholders who said the company misled investors about how much its user base was growing and how much users interacted with its platform. Its co-founder Jack Dorsey resigned as CEO in late November and was replaced by new CEO Parag Agrawal.
Musk’s offer of 54.20 per share includes the digits “420,” a slang for marijuana. He made the same joke in 2018 when he tweeted about having the money to take Tesla private at $420 per share, spurring the SEC to bring a charge of securities fraud against him. Tesla and Musk agreed to Pay $40 Million in penalties, and for Musk to have his tweets approved by a corporate lawyer.
Last week, Musk shared a popular meme of himself surrounded in pot smoke from his 2018 appearance on “The Joe Rogan Experience” podcast. “Twitter’s next board meeting is gonna be lit,” the meme said.
— Elon Musk (@elonmusk) April 7, 2022
The U.S. Securities and Exchange Commission (SEC) reportedly said in a September 2018 filing that Musk had stated he used the number “because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”
In response to Musk’s Twitter bid, the SEC and Justice Dept. have reportedly launched “a joint investigation” into Musk.
BREAKING: As @elonmusk offers to buy the rest of @Twitter a legal source tells @FoxBusiness @SECGov and @TheJusticeDept have launched what he described as a "joint investigation" into a myriad of Musk regulatory issues primarily involving @Tesla https://t.co/TDFLED1XuI
— Charles Gasparino (@CGasparino) April 14, 2022
Saudi Prince Al Waleed, who owns over 5 percent of Twitter’s shares, has rejected Elon Musk’s $43 billion offer to buy the company, saying the offer was too low.
— الوليد بن طلال (@Alwaleed_Talal) April 14, 2022
Twitter Shares Tumble After Saudi Shareholders Reject Musk Bid https://t.co/r4EgmCi3Zi
— zerohedge (@zerohedge) April 14, 2022
Musk had a couple of questions for the Saudi prince in response to his tweet: “Interesting,” he tweeted. “Just two questions, if I may. How much of Twitter does the Kingdom own, directly & indirectly? What are the Kingdom’s views on journalistic freedom of speech?”
Interesting. Just two questions, if I may.
How much of Twitter does the Kingdom own, directly & indirectly?
What are the Kingdom’s views on journalistic freedom of speech?
— Elon Musk (@elonmusk) April 14, 2022
Musk was interviewed Thursday at the Ted 2022 conference in Vancouver, British Columbia, in an appearance that was arranged before the news of his bid broke.
The billionaire said he wanted Twitter to become “an open-source algorithm” so that users can see which tweets are promoted or demoted. He said this is needed to correct the status quo of “having tweets sort of be mysteriously promoted and demoted with no insight into what’s going on.”
After Musk’s buyout bid on Thursday, the investment management company Vanguard swooped in and bought enough shares to become Twitter’s largest shareholder.
According to the most recent publicly available filings with the US Securities and Exchange Commission (US SEC), Vanguard now owns 82.4 million shares of Twitter, or 10.3% of the firm.
The Wall Street Journal reported that Vanguard’s holdings are now worth $3.78 billion, based on Twitter stock’s closing price on Wednesday.
Musk has a 9.2% stake in Twitter.
Twitter’s board adopted a “poison pill” on Friday in a defensive action to thwart Elon Musk’s $43 billion takeover bid. “The poison pill gives Twitter’s existing shareholders time to purchase additional shares at a discount, thus diluting Musk’s ownership stake,” according to Axios.
Instead of accepting Elon’s premium to the share price, Twitter’s board is planning to dilute the company by giving insiders a sweetheart deal. This is a blatant violation of fiduciary duty and should be illegal. https://t.co/irYHfsRWko
— David Sacks (@DavidSacks) April 15, 2022
During his Ted Talk interview, Thursday, Musk said that there was a “plan B” if his offer was not accepted by Twitter’s board.
Q: "If in this case you are not successful, you know, the board does not accept your offer, you've said you won't go higher. Is there a plan B?"
— The Post Millennial (@TPostMillennial) April 14, 2022
— New York Post (@nypost) April 15, 2022