The Tesla CEO, Elon Musk, on Monday announced that he has acquired the social media platform, Twitter at his offer price of $54.20 a share or about $44 billion in total, and plans to make the site privately.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement.
“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
“Twitter has a purpose and relevance that impacts the entire world,” he said in a statement.
Musk’s offer began in early April when he acquired a 9% stake in the company; his purchase price of $54.20 is 38% higher than what the stock closed at that day. The next day, he joined Twitter’s board of directors before changing his mind a week later.
On April 14, Musk’s bid was filed with the Securities and Exchange Commission: an all-cash offer worth $43.4 billion.
“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form,” the 50-year-old billionaire wrote in the filing. “Twitter has extraordinary potential. I will unlock it.”
Seemingly prepared to ward off the offer, Twitter adopted a poison pill, unanimously voting for a limited duration shareholder rights plan that would allow any shareholders to purchase additional shares at a discount if any person or group bought up at least 15% of outstanding common stock without the board’s approval. Without naming Musk, the board’s vote was a direct shot.
But now, the South African entrepreneur has a way to secure the financing, or so he says. In an SEC filing last week, Musk laid out his plan to finance the bid with a mix of debt and cash, with $13 billion in debt financing from investment bank Morgan Stanley and a group of other lenders, $12.5 billion in loans against his own Tesla stock and the last $21 billion in equity financing.
Wall Street analysts have publicly speculated that Twitter’s shareholders would push the board to accept an offer at a higher valuation.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Bret Taylor, Twitter’s Independent Board Chair, said in a statement Monday. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Despite vague promises like increasing trust and defeating the bots, Musk has not yet laid out specific plans for what he intends to do with Twitter, or how hands-on he’ll be with his new social media site. Critics have warned that his goals of free speech could include the reinstatement of banned accounts including former President Donald Trump, but the Florida resident said Monday that he has no intention of returning after being kicked off for inciting violence during the Jan. 6 Capitol coup.
Instead, Trump told Fox News, he’ll finally get around to starting his own account on Truth Social, the already failing social media platform he founded as a bastion of freedom for his similarly banned compatriots.
New York Daily News