Notes

Elon Musk Makes an Unsolicited $43 Billion Bid to Take Twitter Private

Elon Musk, a billionaire entrepreneur, has proposed to buy Twitter Inc. for $43 billion, slamming the company's management and claiming to be the only person who can unleash the "extraordinary potential" of a communication medium used by more than 200 million people every day.

Musk said he'll pay $54.20 a share in cash, which is 38% higher than the price on April 1, the last trading day before he went public with his investment. In New York on Thursday, the social network company's stock was barely changed at $45.81, indicating uncertainty that one of the platform's most outspoken users will succeed in his takeover effort.

Musk, 50, announced the proposed deal in a filing with the U.S. Securities and Exchange Commission on Thursday, after turning down the chance to take a board seat at the company. Musk, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4, making him the largest individual investor. Tesla shares fell about 3% on concern that the attempt to acquire Twitter will be a distraction for Musk.
Twitter's board of directors will consider the idea, and any response will be in the best interests of "all Twitter stockholders," according to the company. The board, which was scheduled to meet early Thursday to assess the proposal, views the takeover bid as undesirable and would likely resist it, according to the Information, citing a source familiar with the situation.

Musk said he's not confident he'll be successful with the acquisition during a TED conference in Vancouver on Thursday, and that he has a backup plan if Twitter's board rejects his bid. He didn't go into detail.

Twitter did not respond to a request for comment on the board meeting or Musk's TED talk.
Also see: Elon Musk's $43 Billion Twitter Bid: The Message He Sent

The bid marks Musk's biggest high-stakes confrontation with the social media platform to date. The executive is one of Twitter's most popular firebrands, regularly posting memes and taunting to his more than 80 million followers as @elonmusk. He's been vocal about the improvements he'd like to see implemented at the social media platform, and the firm granted him a seat on the board when he announced his $3.35 billion investment.

Musk began soliciting feedback from Twitter users almost immediately after disclosing his stake, suggesting everything from turning Twitter's San Francisco headquarters into a homeless shelter to adding an edit button to messages and awarding automatic verification marks to premium members. Given that numerous celebrities with large followings rarely tweet, one tweet suggested that Twitter might be dying.

He is one of the few people who can fund a full takeover because he is dissatisfied with the power that comes with being Twitter's largest investment. According to the Bloomberg Billionaires Index, he is currently worth almost $260 billion.

Despite the fact that Musk is the world's richest man, he has yet to reveal how he would come up with $43 billion in cash.

"This becomes a hostile takeover offer that will cost a significant amount of money," said Neil Campling, Mirabaud Equity Research's head of TMT research. "To fund it, he'll have to sell a significant amount of Tesla shares or take out a large loan against it."

Musk stated at the TED conference on Thursday that if he wins, he wants to keep as many other stockholders as the law allows for a private corporation, rather than being the only owner.

"Technically, I could afford it," Musk added, "but this isn't a method to earn money." It's just that I believe this is — my gut tells me that having a public platform that is fully trusted and broadly inclusive is critical to civilization's destiny. I don't give a damn about economics."

Much of Musk's rage at Twitter has been centered at what he sees as the platform's censoring. Musk stated in a letter to Twitter's board of directors that he feels the company "can neither survive nor serve [its free speech] societal mandate in its current form." Twitter should be turned into a private firm."

Musk is providing a 54 percent premium over the Jan. 28 closing price, which is when he started accumulating his initial Twitter investment. It is unlikely that the takeover attempt will take a long time.

"If the sale doesn't work, I'll have to reevaluate my position as a shareholder," Musk added. "I don't have faith in management and don't believe I can drive the necessary change in the public market."

According to today's announcement, Musk notified Twitter's board of directors over the weekend that he believes the firm should be taken private.

According to Vital Knowledge's Adam Crisafulli, the $54.20 per share offer is "too low" for shareholders and the board to accept, despite the fact that the company's shares exceeded $70 less than a year ago.

Saudi Prince Alwaleed bin Talal, a Twitter shareholder, said Musk's offer does not come "near to the intrinsic worth" of the company "given its development prospects."

Although Musk stated that his offer was "best and final," it creates the door for competitors to team up with him or outbid him. Larry Ellison, the CEO of Oracle and a member of the Tesla board of directors, recently attempted to purchase a share in the social media company TikTok.

Musk has enlisted the help of Morgan Stanley to help him with his quest. The number 420, which is generally known as a coded reference to marijuana, is also included in the offer price. He also chose $420 as the amount at which Tesla could be taken private in 2018, a decision that drew SEC attention.


"In the coming days, there will be a slew of issues about finance, regulation, and balancing Musk's time (Tesla, SpaceX)," said Dan Ives, a Wedbush analyst. "However, based on this filing, Twitter's acceptance of the bid is a now or never proposition."

I invested in Twitter because I believe it has the potential to become a global forum for free speech, which I feel is a social requirement for a functioning democracy.

However, since making my investment, I've realized that the company, in its current form, can neither prosper nor serve this societal necessity. As a private firm, Twitter must be reformed.

As a result, I'm offering to buy 100% of Twitter in cash for $54.20 per share, a 54 percent premium over the day I started investing in Twitter and a 38 percent premium over the day my investment was publicly publicized. My offer is my best and final offer, and if it is not accepted, I will have to reevaluate my shareholder position.

Twitter has tremendous potential. It will be unlocked by me.

Elon Musk's whole letter to Twitter's board of directors .