Elon Musk, has offered to acquire Twitter for $41.39 billion, claiming that his proposed acquisition is necessary to protect free expression
Musk’s Offer To Buy Twitter Has Impact On Crypto
A little more than a week after his 9.2 percent ownership in the firm was publicly disclosed, Tesla CEO Elon Musk offered $54.20 a share. This marks a 38% premium over the closing price on April 1, the final trading day before Musk revealed that he had become Twitter’s largest shareholder, and an 18% premium over the closing price on Wednesday.
Twitter published a statement on Thursday acknowledging receipt of the offer. According to the firm, its board of directors will carefully study the proposal “to decide the course of action that it feels is in the best interests of the company and all Twitter investors.” Twitter (TWTR) shares rose as high as 13% in premarket trade on the offer Thursday, but quickly dropped to a gain of approximately 7%, indicating that investors doubted the deal would be accepted.
The move would elevate the software entrepreneur to the status of new media tycoon, able to shape the future of a platform where he has 80 million followers and has pursued personal vendettas and promoted his agenda. In a filing with the US Securities and Exchange Commission on Thursday, the entrepreneur disclosed the offer.
Musk and Tesla agreed to pay a penalty to the SEC as part of a settlement after being accused of securities fraud in connection with the tweet. Any tweets from Musk containing information significant to Tesla must now be approved by a corporate lawyer, an order Musk is attempting to overturn.
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 after he tweeted about having the money to take Tesla private at $420 per share. That didn’t happen, but the tweet caused Tesla’s stock price to jump. Musk’s latest trouble with the SEC could be his delay in notifying regulators of his growing stake in Twitter.
Quotes
Elon Musk said in a letter to Twitter chairman 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. Since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
According to Dan Ives, a tech analyst at Wedbush Securities, it will be tough for Twitter to reject Musk’s proposal at the amount he is asking. “Musk is putting the Twitter board’s backs against the wall. The premium is at a level that will be hard to see other bids occurring. Musk making this about free speech is the exact opposite of what every other corporate raider would do about monetizing the company’s value. It’s historic and bizarre at the same time. Banks will be lining up to be part of the consortium of lenders to the world’s richest person”
