In a letter to Twitter Chairman Bret Taylor, Musk said that he has offered to buy the social media giant in a deal worth up to $43 billion.
The unsolicited bid for Twitter comes after Musk recently announced a 9.2% stake in the company and refused a position on its board of directors. Musk said that taking the company private is the only way to unlock its full potential in his letter.
“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,” Musk said in the letter.
“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 added. “Twitter has extraordinary potential. I will unlock it.”
Musk said that he is offering to buy Twitter for 54.20 per share in cash, a 54% premium from when he first started purchasing shares and a 38% premium since he disclosed his position on April 4.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk said.
In a brief statement Thursday, Twitter said, “The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders.”
The news has caused Twitter’s share price to jump 12% in premarket trading.
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Some equity analysts have said that shareholders could be interested in accepting Musk’s bid as the company has been struggling to grow its client base and engagement.
Wedbush Securities analyst Daniel Ives said in a note to clients that this could be a “now or never bid” for shareholders.
“It would be hard for any other bidders/consortium to emerge and the Twitter board will be forced likely to accept this bid and/or run an active process to sell Twitter,” he said.
However, Musk also has a reputation for backing tracking on some of his promises. In February last year, Musk surprised the cryptocurrency world after announcing Tesla’s $1.5 billion investment in Bitcoin. He also said the electric car company would accept cryptocurrencies.
The news created a massive rally in the digital currency; however, by June, Tesla had sold 10% of its initial stake and flipped on its decision to accept bitcoin.
Posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com