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HomeBussinessElon Musk offers over $43 billion to buy Twitter

Elon Musk offers over $43 billion to buy Twitter

Elon Musk has offered to buy Twitter for more than USD 40 billion, a US regulatory filing shows.

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The billionaire Tesla and SpaceX founder has proposed purchasing “100% of Twitter for $54.20 per share in cash,” valuing the company at $43 billion.

Musk stated that his valuation is a “38% premium” to the price of Twitter stock the day before it was announced that he had invested in the company earlier this month.

Musk called that price his best and final offer, although he provided no details on financing. 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.”

Twitter said it has received Musk’s offer and will decide whether it is in the best interests of shareholders to accept or continue to operate as a publicly traded company.

Analyst Daniel Ives of Wedbush said in a client note that he believes “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.

Earlier this month, it was announced that Musk had purchased a 9% stake in Twitter and would join the board, only for Twitter CEO Parag Agrawal to confirm just days later that Musk had changed his mind.

In recent weeks, the billionaire has been a vocal critic of Twitter, primarily because he believes it violates free speech principles. The social media platform has enraged supporters of Donald Trump and other far-right political figures by suspending their accounts for violating its content standards on violence, hatred, or harmful misinformation. Musk has a history of his own.

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 he 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. Musk left a few clues on Twitter about his thinking, such as by “liking” a tweet that summarized the events as Musk going from “largest shareholder for Free Speech” to being “told to play nice and not speak freely.”

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.

Shares of Twitter jumped 11% before the market open, while shares of Tesla slipped about 0.9%. 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. Musk’s latest trouble could be his delay in notifying regulators of his growing stake in Twitter.

Source: Associated Press

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