Elon Musk, the billionaire owner of Tesla Inc (NASDAQ:TSLA) is set to launch a US$43.4bn hostile bid for Twitter Inc (NYSE:TWTR).
The Tesla founder announced a 9.1% stake in the social media platform earlier this month, is proposing to buy all of the shares in Twitter he does not already own at US$54.20 a pop. The proposal is indicative and non-binding, which means there is no guarantee a firm offer will materialise.
Shares in Twitter closed at US$45.85 on Wednesday.
Musk, the world’s wealthiest man, was all set to join the board of Twitter over the weekend but changed his mind, sparking speculation that he was considering a full bid for the company; had he joined the board he would have been obliged not to raise his stake above 15%.
He recently mused whether Twitter is dying. Whether that was a deliberate attempt to drive down the price of the stock is open to debate; Musk apologists will see this latest move as his attempt to save the company and that seems to be the line that Musk is adopting, based on his communications with Bret Taylor, the chairman of Twitter.
In a stock exchange filing, Musk said he invested in Twitter because he believes in its "potential to be the platform for free speech around the globe" but he believes the company needs to be taken private in order for necessary changes to be pushed through without having to worry about the wishes of shareholders.
“Sowing the seeds of championing ‘free speech’ is one thing but let’s not forget Elon’s view of simply voicing opinion has been seen as reckless by regulators in the past,” opined Dan Lane, an analyst at Freetrade.
“The headlines might inject a bit of life into Twitter’s share price but it could mean SEC [Securities Exchange Commission] scrutiny bleeds over from Musk’s mere use of the platform to the platform itself. That’s not something the firm will want hanging over it. There’s also the question of where this all fits in with Musk’s broader portfolio. Unlocking value is clearly the goal here but is it just a vanity project?” Lane wondered.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022