Tesla CEO Elon Musk is offering to buy Twitter, saying the social media platform he criticized for not living up to free speech principles needs to be turned into a private company.
Twitter Inc. said in a regulatory filing on Thursday that Musk, currently the company’s largest individual shareholder, has proposed to buy the remaining shares of Twitter that he does not already own for $54.20 per share, up from $43 billion. offer more.
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Musk called that price his best and final offer, though he did not provide any details on financing. The offer is non-binding and is subject to financing and other conditions.
Musk said in the filing, “I invested in Twitter because I believe in its potential to be the platform for free speech around the world, and I believe free speech is a social imperative to a functioning democracy.” “
“However, since making my investment, I have now realized that the company will neither thrive nor meet this social imperative in its present form. Twitter needs to be turned into a private company.”
Twitter shares rose 4.3% to $47.83, but well below Musk’s offer price, a sign that some investors may be skeptical that the deal will go through. The stock is still trading below its 52-week high of $73.
Twitter said it has received Musk’s offer and will decide whether it is in the best interest of shareholders to continue operating as a publicly traded company.
Wedbush analyst Daniel Ives said in a client note that he believes “this soap opera with Musk owning Twitter will end after this aggressively hostile takeover of the company.” He thinks it will be difficult for any other bidder or consortium to come forward and said Twitter’s board will be forced to accept.
Begin the process of offering Musk or selling the company.
Musk disclosed in regulatory filings in recent weeks that he had been buying shares in almost daily batches since January 31, ending up with a stake of about 9%. Only Vanguard Group’s suite of mutual funds and ETFs control more Twitter stocks. A lawsuit filed Tuesday in federal court in New York alleged that Musk illegally delayed the disclosure of his stake in the social media company so that he could buy more shares at lower prices.
The billionaire has been an outspoken critic of Twitter in recent weeks, mostly on his belief that it falls short on free speech principles. The social media platform has angered followers of Donald Trump and other far-right political figures, who have suspended their accounts for violating their content standards over violence, hate or harmful misinformation. Musk describes himself as a “free speech autocrat” but has also been known to block other Twitter users who question or disagree with him.
According to a filing, after Musk announced his stake, Twitter immediately offered him a seat on its board on the condition that he owned no more than 14.9% of the company’s outstanding stock. But the company said five days later that it had refused.
He didn’t say why, but the decision coincided with a barrage of now-deleted tweets from Musk, proposing major changes to the company, such as dropping advertising — its main source of revenue — and moving its San Francisco headquarters. Converting to a homeless shelter.
Twitter hasn’t lost money in the past year as well as its social media rivals. The company reported a net loss of $221 million for 2021, largely linked to the settlement of a lawsuit by shareholders who said the company had misled investors about how much its user base was growing and that users How much did you interact with its platform? Its co-founder Jack Dorsey resigned as CEO at the end of November and was replaced by new CEO Parag Agarwal.
Musk’s more than 81 million Twitter followers make him one of the most popular figures on the platform, rivaling pop stars like Ariana Grande and Lady Gaga. But his prolific tweets sometimes landed him in trouble with the US Securities and Exchange Commission and others.
Musk and Tesla agreed to pay $40 million in civil fines in 2018 and Musk had his tweet approved by a corporate attorney after he spoke about having the money to take Tesla private at $420 per share. tweeted. That didn’t happen, but the tweet caused a jump in Tesla’s share price. Musk’s latest problem with the SEC may be his delay in notifying regulators about his growing stake in Twitter.
His 2018 comments about taking Tesla private at $420 per share and his latest bid to take Twitter private at $54.20 per share jokingly reference the number 420, a slang reference to marijuana.