Wed. Jun 19th, 2024

Elon Musk Offers to Buy Twitter

His takeover bid at $54.20 a share comes just weeks after he became the company’s largest shareholder.

Elon Musk has launched a takeover bid for Twitter, offering to buy it for $54.20 a share, just weeks after he became the social media company’s largest shareholder.

Mr. Musk said this was a “best and final offer,” representing a 54 percent premium over the day before he began investing in the company in late January, according to a Securities and Exchange Commission filing. It would value the company at about $43 billion.

In the filing, Mr. Musk said “I don’t have confidence in management” and that he couldn’t make the changes he wanted in the public market.

If the offer is not accepted, Mr. Musk said, he would “need to reconsider my position as a shareholder,” according to a letter sent to Bret Taylor, Twitter’s chair, on April 13 and enclosed in the filing. “Twitter has extraordinary potential. I will unlock it.”

Twitter shares were 11 percent higher in premarket trading. On Wednesday, the closing price was $45.85. Morgan Stanley is Mr. Musk’s financial adviser for the bid, according to the filing.

On April 4, a regulatory filing revealed that Mr. Musk, the billionaire chief executive of Tesla and SpaceX and the world’s richest man, had bought a 9.2 percent stake in Twitter. The next day, Twitter announced Mr. Musk would join its board but by the end of the week he rejected the offer.

“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,” Mr. Musk said in the letter to Mr. Taylor sent on April 13.

“However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form,” he wrote. “Twitter needs to be transformed as a private company.”

Twitter’s share price has climbed 16 percent since April 1 and Mr. Musk’s investment became public.

In the Securities and Exchange Commission filing Elon Musk submitted expressing his intent to buy Twitter and make it a private company, Mr. Musk sounded a lot like the activist investor he has become in recent weeks, saying he was not “playing the back-and-forth game.”

Instead, he added, “I have moved straight to the end.”

He continued: “It’s a high price and your shareholders will love it.”

Mr. Musk offered to buy the company for $54.20 per share in cash.

In a section of his filing, a 13D, which must be submitted to the S.E.C. when a person acquires more than a certain percentage of a company’s shares, Mr. Musk reiterated his concerns about free speech on the platform and said he didn’t trust Twitter’s current leadership.

“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,” Mr. Musk said in the filing. “This is not a threat, it’s simply not a good investment without the changes that need to be made. And those changes won’t happen without taking the company private.”

Mr. Musk, who has nearly 82 million followers on Twitter, has been quiet in recent days. He posted a link to the filing shortly after it was made public: “I made an offer.”

— Marie Solis

Twitter shares rose 11 percent in premarket trading following the disclosure of Elon Musk’s takeover bid for the social media company early Thursday morning.

Mr. Musk offered $54.20 a share, representing a 54 percent premium over the share price the day before he began investing in the company in late January, according to a Securities and Exchange Commission filing.

The closing price was $45.85 on Wednesday.

It would value the company at about $43 billion.

Shares of Twitter, which went public in late 2013, rose during the pandemic, reaching $77.06, its highest ever, in February 2021. But the price has mostly slumped since then, falling to about $33 a share last month.

Twitter on Thursday said that it received Elon Musk’s “unsolicited, nonbinding proposal” to buy the company and take it private.

In a statement, Twitter said that its board would review Mr. Musk’s Securities and Exchange Commission filing and “determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.”

The possibility that Mr. Musk might move to buy the company outright arose this week, when Twitter announced that he would no longer join the board. Mr. Musk’s initial agreement for the board seat included stipulations that he would not buy more than 14.9 percent of Twitter’s stock or takeover the company. When Twitter’s chief executive said Mr. Musk would no longer join the board, that agreement was severed, allowing Mr. Musk to act as any other shareholder.

Mr. Musk currently owns 9.2 percent of Twitter, making him its largest shareholder.

— Marie Solis

Here’s what New York Times reporters Mike Isaac and Lauren Hirsch wrote on April 4 when Elon Musk disclosed that he had purchased a 9.2 percent stake in Twitter, the social media platform where he has over 80 million followers.

When Elon Musk mulled taking Tesla private in 2018, he posted on Twitter to tell the world about it. When he got stuck in traffic in 2016, he tweeted the idea of an underground tunnel system to alleviate “soul destroying” congestion. And when he challenged President Vladimir V. Putin of Russia to one-on-one combat last month, he broadcast it on Twitter.

Now Mr. Musk is putting his money where he mouths off.

Here is some of our coverage since then.

Elon Musk Joins Twitter’s Board, Pitching Ideas Big and SmallFree speech, open-source algorithms — and an edit button: The world’s richest person will soon help steer the social media platform where he has a huge following.

Elon Musk Will Not Join Twitter’s Board, Company SaysThe announcement reverses a decision last week, when Twitter said Mr. Musk would become a board member after amassing a 9.2 percent stake in the company.

Twitter Grapples With an Elon Musk Problem: Mr. Musk, Twitter’s biggest shareholder, is free to buy more stock in the company and could use the platform against itself. Some employees are dismayed.

— The New York Times

By Chala Dandessa

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