The emerging business relationship between Tesla CEO Elon Musk and Twitter diverted down a completely new path Thursday when Musk announced his aim to take Twitter private via a hostile takeover on, where else, Twitter.
Thursday morning, Musk tweeted a link to an SEC filing made Wednesday revealing his bid to purchase the social media company outright and take the company private as its sole owner. “I made an offer,” Musk wrote alongside the link.
According to the filing, Musk offered to buy all shares of Twitter at the memey price of $54.20 a share, a marked increase from its current share value of roughly $45, but lower than its 52-week average. The per-share price offered by Musk would value the purchase at roughly $43 billion. Musk noted that this was his “best and final offer” and that he would “need to reconsider” his current holding in the company if Twitter turned him down.
Musk’s offer is the latest in what has been a tumultuous few weeks as Musk turned his financial and cultural gaze toward the social media platform. Musk announced he had acquired a 9.2% stake in the company on April 4, making him Twitter’s largest shareholder, after purchasing millions of shares in the company over a three-month span beginning in Jan. 2022. He was also set to join the company’s Board of Directors, promising to take a more active role in the policy of the platform’s operations, before deciding not to do so days later.
Wednesday’s filing potentially reveals why Musk make that decision, Speaking to The Washington Post, CFRA equity researcher Angelo Zino noted that joining the board would have effectively “handcuffed” Musk from increasing his stock holdings in the company to his desired level, including his hostile takeover bid.
Musk’s late disclosure of his stake in Twitter also ran afoul of securities law, furthering Musk’s long-simmering rivalry with the U.S. Securities and Exchange Commission. A Twitter shareholder filed suit against Musk in federal court this week accusing him of committing securities fraud in connection to his late disclosure. It is currently seeking class action status.
Musk has continually framed his investment in Twitter as a mission of preserving free speech on the platform, something he has constantly criticized via his own Twitter account for years. Shortly before publicly revealing his Twitter stock stake, Musk teased the idea of starting his own social media company a day after posting a Twitter poll asking his nearly 82 million followers if the platform “rigorously adheres” free speech principles.
That messaging continued in a letter to Twitter board chair Bret Taylor. “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. “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.”
“I would argue there would be a negative impact on democracies worldwide if someone like Elon Musk owned Twitter,” BotSentinel founder Christopher Bouzy told Wired. “Twitter would become a cesspool of mis- and disinformation with real-world consequences.”
The ball is now in the Twitter board’s court. In a statement, the Twitter board said it would “carefully review” Musk’s offer. There are multiple ways this could play out in the coming months. The board could approve the purchase, send the matter to a shareholder vote or stall the deal by invoking a shareholder rights plan and diluting the value of shares in the company.
Should the deal be put to a shareholder vote, at least one major holder of Twitter stock, Saudi Arabian billionaire and Kingdom Holding Company head Prince Alwaleed bin Talal, appears to oppose Musk. “I don’t believe that the proposed offer by Elon Musk comes close to the intrinsic value of Twitter given its growth prospects,” he tweeted. KHC reported owning 5.2% of total shares in Twitter in 2015, but it is currently unknown if it has increased that stake in the years since. “I reject this offer,” he added.