Tesla CEO Elon Musk is once again making public stunts on social media. This time, he made a statement about Twitter, offering to buy the company and make it private — a move aimed at helping the social media website transform.
Uncertain Plans By Elon Musk
Elon Musk wants Twitter all to himself. Earlier this month, the Tesla CEO offered to buy the company for $54.20 per share. The total sum comes to a whopping $41.4 billion! This price is nearly two times larger than what shares were valued at on the last trading day in April.
Previously, Musk declined a spot on Twitter’s board. Afterward, he disclosed that he spent $2.6 billion for 73.1 million Twitter shares — more than 9% — making Musk the biggest shareholder of the company. However, if his new offer is denied, he says he’ll rethink holding any shares of the company. “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,” he said in a letter to Twitter. “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.” Musk addressed the letter to Bret Taylor, the chair of the Twitter board. Weirdly enough, he didn’t write one to the CEO, Parag Agrawal. “Twitter has extraordinary potential. I will unlock it,” the billionaire ended his note.
Twitter executives want the best for their employees and stockholders and are looking into the proposal. Dan Ives, a tech analyst with Wedbush Securities, stated that Musk’s proposal is undeniably attractive. “The premium is at a level that will be hard to see other bids occurring,” he commented.
Turning Twitter Upside Down
What would Twitter do in return for a bid that high? Many changes would occur. After all, Musk’s hope of free speech doesn’t bring any revenue to the company. “Musk making this about free speech is the exact opposite of what every other corporate raider would do about monetizing the company’s value,” Ives explained. “It’s historic and bizarre at the same time.”
Employees aren’t exactly happy with the offer, either. After the bold claim by the billionaire, Twitter management called an emergency all-hands meeting. Agrawal did his best to keep everyone calm. “This provides all of us with this moment where we feel distracted, where we feel a loss of control,” he said. “I am personally going to spend my time focusing on things I can control, and I believe it will matter.”
The Twitter board is already planning a strong response. They instated a “poison pill,” a term used by many big companies. This failsafe limits Musk’s hopes and abilities to buy Twitter by making it more expensive and difficult to purchase more than 15% of the company’s shares. The board are also looking into other buyers. But the price point Musk offers could still sway shareholders to sell. “Right now there’s more questions than answers as to his next step,” Ives concluded.