The Elon Musk-Twitter relationship, which has been repeated over and over again, took a new turn on Thursday when the world’s richest man made a hostile offer to buy the entire company for more than $ 43 billion.
In a regulatory request, Twitter revealed that Musk had offered to buy all the company’s unpaid shares for $ 54.20 per share. With 800 million shares available, the company is valued at just over $ 43 billion.
Speaking at a TED conference in Vancouver on Thursday, Musk said his motives were not financial, but rather the desire to preserve the “public square” that Twitter has become.
“It’s not a way to make money … I don’t care about the economy at all,” he said.
“It’s just my strong and intuitive feeling … that having a public platform that’s as trusted and inclusive as possible is crucial to the future of civilization,” said Musk, Tesla’s chief executive.
I made an offer https://t.co/VvreuPMeLu
– @elonmusk
“The truth is very important to me,” he said of his motives. “You’re kind of pathological, that matters to me.”
The move is the latest in a month-long saga between Musk and Twitter, after it became clear in early April that he had quietly bought more than 73 million shares in the company – more than any other individual or entity owns.
This led to his invitation to join the company’s board of directors, but this overture fell apart days later.
WATCH Musk’s share on Twitter raises questions about his plans:
Elon Musk has become the largest shareholder on Twitter, raising questions about the motive
With an unexpected move, Tesla CEO Elon Musk acquired a 9.2% stake in Twitter – becoming the company’s largest shareholder in social media. Musk has not made public a motive, but some experts say they are worried he could use his share to change the tone of Twitter. 2:02
Musk called his hostile takeover offer his “best and final price” for the company, but he acknowledged that the deal was far from certain.
Investors seem to think the deal is highly questionable, as the stock is trading at $ 45 a share on Thursday, well below Musk’s offer price.
What happens next
“Investors are not expecting another offer or a bidding war,” said Colin Ceszynski, a strategist at SIA Wealth Management in Toronto.
Daniel Ives, an analyst at Wedbush Securities in New York, told CBC News in an email that he believes it could take between 30 and 45 days for the process to settle, but he ultimately believes Musk will be successful.
“This soap opera will end with Musk owning Twitter after this aggressively hostile takeover of the company,” Ives said.
WATCH A technical analyst says Musk will eventually win:
An analyst disrupts Musk’s move on Twitter
Wedbush Securities analyst Dan Ives discusses why Elon Musk is trying to buy Twitter and whether the hostile takeover of the billionaire is likely to succeed or not. 3:39
The multi-billionaire has been a staunch critic of Twitter in recent weeks, largely because he believes he doesn’t live up to the principles of free speech.
The social media platform has angered followers of former US President Donald Trump and other far-right political figures whose accounts have been suspended for violating content standards for violence, hatred or harmful misinformation.
Musk also has a history of his own tweets causing legal problems.
He confirmed that if he succeeds in his offer, he would like to implement the long-discussed edit button, which will allow users to change the tweet after it is published. Editing functionality will only be available for a “short period of time,” Musk said, and editing will “reset all retweets and favorites.”
He also promised to remove “spam and fraudulent bots” on the platform.
“Technically I could afford it”
Musk, who is worth more than $ 259 billion, has the financial means to buy Twitter, but says he prefers to take the company private with as many private investors as possible, as long as they share the common goal of keeping the platform open.
“It’s not about understanding how to monopolize or maximize my property,” he said.
When asked at a conference in Vancouver if funding was provided for the deal, he joked, “Technically I could afford it.”
This “secured financing” line was a reference to something that got him into hot water with regulators in 2018, when he said on Twitter that he planned to take a private company for electric cars Tesla for $ 420 per share.
The deal never materialized, and he was forced to settle with the US Securities and Exchange Commission for $ 40 million for misleading investors. In his comments on Thursday, Musk resumed this old battle.
“With Tesla during the day, funding was actually provided – I want to be aware of that,” Musk said, adding that he had settled with the SEC at the time because of pressure from regulators on his creditors. He described it as “like putting a gun to your child’s head. So I was forced to admit it” and used swear words to describe the SEC.
The Twitter board is meeting to discuss the offer
Musk described himself as an “absolutist of freedom of speech” and said he did not believe Twitter adhered to the principles of freedom of speech – an opinion shared by Trump’s followers and a number of other right-wing political figures whose profiles were suspended for violating Twitter content policies.
“Be very careful with constant bans,” he said. I think timeouts are better.
Twitter’s board of directors has confirmed receipt of Musk’s offer and is meeting Thursday to discuss whether to accept it or recommend shareholders reject it. There is a meeting of the entire staff with Twitter employees at 17:00 ET on Thursday, the American financial channel CNBC reported.
At least one well-known Twitter investor has indicated that he has no interest in selling for what Musk offers to pay.
Saudi Prince Al-Walid bin Talal Al-Saud, another major shareholder on Twitter, spoke out against the deal, noting that the proposed price did not “approach the intrinsic value of Twitter, given the growth prospects”.
I do not believe that the offer offered by
To be one of the biggest & long-term shareholders of Twitter, pic.twitter.com/XpNHUAL6UX
– @ Alwaleed_Talal
Through his personal holdings and influence over Saudi Arabia’s national investment fund, the prince says he will soon control more than five percent of Twitter’s shares and has no interest in selling them to Musk.
Geneviève Roch-Decter, CEO of Toronto-based Grit Capital, says Musk’s interest is not surprising.
“Billionaires love to own media platforms,” she told CBC News in an interview, “and Elon Musk loves his megaphone.”
Regardless of the price paid, Roch-Decter says it would be worthwhile for Musk to have such a large media presence without worrying about profitability.
“This is a man who spends zero dollars on marketing … The marketing he does is just tweeting crazy things.”
The company’s share price has been falling for years, which could make the buyout prospect attractive to many shareholders.
“They’re like a dinosaur,” she said. “I’m not sure that just having an edit button here and a tip jar here will move the revenue dial.”
Other analysts believe the story is far from over. “Musk’s ‘best and last’ non-binding offer of $ 43 billion has many conditions, including the completion of funding, which we believe has a low probability of success,” said Bloomberg Intelligence credit analyst Robert Schiffman. “[But] suitors with well-capitalized white knights may appear. “
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