Tesla CEO Elon Musk has sent an official offer to buy Twitter and sent it as an ultimatum as he basically threatens to sell his shares if the offer is not accepted.
And the saga continues.
Over the last week, we have been reporting on the strange saga that has been Musk’s investment in Twitter.
Last week, an SEC filing revealed that Musk has been buying shares of Twitter and that his investment now surpasses $3 billion or about 9% of the company’s total outstanding shares.
It’s enough to make him the single largest shareholder in the company.
Musk didn’t make his plan clear with this investment in Twitter, but as we noted, he is not known for making passive investments and we suspected that he would look to be involved.
Tesla’s CEO had recently talked about starting a competing social media platform and how he believes that Twitter is dying and moving away from free speech.
A day after revealing his stake in the company, Musk accepted an offer from Twitter’s board and management to join its board of directors. This signaled that Musk was willing to join the company and work with them from the inside.
However, it was later revealed that Musk changed his mind just a day later and walk away from the board seat, which also forced him to not buy more than 14.9% of Twitter’s shares.
As we reported at the time, it opened the door for Musk to keep buying shares and potentially attempt a hostile takeover of the company.
Sure enough, this morning, an SEC filling reveals that Musk has made an official offer to buy the social media platform at $54.20 a share.
Musk wrote in the offer:
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.
This is an aggressive offer as Musk appears to be threatening to sell his shares in the company if the offer is refused, which could send the stock tumbling.
In his proposal, Musk explained his logic behind buying the company and taking it private:
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.
He also added that he thinks Twitter has “extraordinary potential” and he believes he “will unlock it.”
As the offer is apparently final, it doesn’t sound like there will be negotiations with Twitter’s board, which likely simply put the offer to a shareholder’s vote.
Electrek’s Take
Of course, Musk had to fit a “420” in the price. While a joke, it doesn’t sound like the offer is an actual joke.
However, I’m not sure if it will be accepted. But what if it is?
This is a cash offer that will require Musk to have over $40 billion cash. I think this is something to consider for Tesla shareholders as I wouldn’t be surprised if he would have to liquidate additional Tesla shares in order to pay for it.
Also do you think a free speech platform should be owned and controlled by one person?
What do you think? Let us know in the comments section below.
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Author: Fred Lambert
Source: Electrek
