Well, that was fast.
On April 25th, Twitter’s board of directors accepted Musk’s offer of $54.20 per share, or $44 billion, for total control of the company. It was the same price he named in his initial offer on April 14th. Upon completion of the transaction, Twitter will become a private company.
The will-he / won’t-he-buy-Twitter saga is nearing completion with a deal to be announced as soon as Monday. Twitter is in the final stretch of negotiations with Musk, reports Bloomberg. Multiple outlets are reporting that Twitter’s board was considering Musk’s funded offer over the weekend, with The New York Times saying the company’s 11 members were negotiating with Musk into the morning on Monday. Twitter is scheduled to report earnings on Thursday, by which time the company is expected to have weighed in on Musk’s bid, reports The Wall Street Journal.
The story so far:
A thousand years ago, on April 4th, 2022, Elon Musk announced that he had purchased 9.1 percent of Twitter. The news that the world’s richest man was now (briefly) the largest shareholder in his preferred social media platform sent the stock price soaring and many a keyboard a-typing.
Musk immediately set about soliciting suggestions about ways to improve Twitter by — what else — tweeting a poll. The company responded by offering him a board seat, a move that would have restricted him to owning just 15 percent of the company. At first, he said yes. Then he changed his mind and said no. Meanwhile, our resident Twitter and Musk experts, Casey Newton and Liz Lopatto, respectively, dug deeper into why Musk was flirting with Twitter and what the likely outcomes would be.
After declining a seat on Twitter’s board, Musk updated his filing with the Securities and Exchange Commission to indicate that he would not be a passive player in the company’s affairs. Gone was the language that he would restrict his holdings to just 14.0 percent of the company. In retrospect, this was the first clue that he may attempt something more impactful than just buying some stock of serving as a board member.
Platformer’s Casey Newton isn’t the only one who didn’t believe Musk would launch a hostile takeover of Twitter. After news broke that Musk had acquired 9.1 percent of the company’s shares, many people briefly entertained the notion that Musk might try to buy the whole company, only to eventually conclude he had already gotten everything he wanted out of Twitter.
Casey was right in positing that Twitter’s poison pill provisions may not be enough to stop Musk. But he also assumed that Musk would just continue to troll the company through his tweets — which certainly still is a likely outcome.
Anyone who’s been in the market to buy a house knows about “best and final” offers. In his opening salvo, Musk claims his bid to buy Twitter is exactly that. Whether that bolsters his position or ends up painting him into a corner is too early to say. But it is clear that he is offering Twitter’s shareholders a pretty fair premium: $43 billion for a company with a $37 billion market cap.
Musk says that Twitter must go private in order to undergo the changes that need to be made. These include an edit feature, an open-source algorithm, less moderation, and a higher bar for removing offending tweets.
Musk is a very rich guy. So, naturally, he would say that he isn’t interested in buying Twitter to make money. He views Twitter as the “de facto town square” and wants to open source the social media company’s algorithm. He’s trying to frame the whole takeover bid as some sort of crusade to protect free speech.
But even a free speech maximalist like Musk needs to convince shareholders that his buyout offer is in their financial self-interest. Otherwise, what are we really doing here?
Musk is a prolific Twitter user. He’s also a troll, and Liz Lopatto lays out what exactly he will need to do in order to get people to take him more seriously. Musk has a tendency to shoot from the hip, but several corporate governance experts told us they doubt he actually thought this whole thing out.