Elon Musk recently became the largest stakeholder in the microblogging platform Twitter. The spotlight remained on him when he polled Twitterati on whether or not they wanted an Edit button for tweets. Although Musk refused to take a seat on the Twitter board, he has made a somewhat controversial offer to buy out the company for a whopping $43 billion.
Elon Musk is one of the very few individuals who can muster the finances and courage to make such a steep and audacious offer. If you aren’t aware, the Bloomberg Billionaire’s Index pegs his net worth at approximately $260 billion. He offered $54.20 per Twitter share in cash, valuing the company at around $43 billion. This is a 54 percent premium over the closing price on January 28, after which Musk began building his initial stake in Twitter.
In a letter to the board, Musk wrote:
“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.
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.
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.”
The 50-year-old announced the possibility of this purchase on Twitter (of course), linking to the corresponding SEC filing.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
Twitter said that its board will review the proposal and take a call in the best interest of “all Twitter stockholders.” However, it remains unknown how Musk will arrange for $43 billion in cash to complete the transaction if it goes through. He said:
“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.”
To get you up to speed, the Tesla CEO hasn’t had the best time on Twitter. He often tweets out memes critiquing Twitter’s decisions. After he announced his $3.35 billion stake in the company, he sought ideas from the platform’s users about the changes they wished to see, including the long-requested Edit button. In a separate tweet, he said Twitter might be dying because several celebrities haven’t tweeted much recently, despite their high follower count.
Why do you think Musk has offered to buy Twitter? Will the company’s board accept the offer? Tell us what you think in the comments.[Via Bloomberg]