Billionaire Elon Musk, a entrepreneur, has proposed to buy Twitter Inc. for $43 billion, slamming the company’s management and claiming to be the only person who can unleash the “extraordinary potential” of a communication medium used by more than 200 million people every day.
Musk said he’ll pay $54.20 a share in cash, which is 38% higher than the price on April 1, the last trading day before he went public with his investment. In New York, shares of the social network business fell 1.1 percent to $45.33, indicating uncertainty that one of the platform’s most vociferous users will succeed in his takeover bid, reports Bloomberg.
Musk, 50, revealed the proposed deal in a filing with the Securities and Exchange Commission on Thursday, after declining an offer to join the company’s board of directors. Musk, who also owns Tesla Inc., first revealed a stake of around 9% on April 4, making him Twitter’s largest single shareholder. Tesla’s stock dropped 3% on concerns that Musk’s effort to acquire Twitter would be a distraction.
Twitter’s board of directors will consider the idea, and any response will be in the best interests of “all Twitter stockholders,” according to the company. According to CNBC, the board was scheduled to meet at 10 a.m. New York time to evaluate the proposal.
The bid marks Musk’s biggest high-stakes confrontation with the social media platform to date. The executive is one of Twitter’s most popular firebrands, regularly posting memes and taunting to his more than 80 million followers as @elonmusk. He’s been vocal about the improvements he’d like to see implemented at the social media platform, and the firm granted him a seat on the board when he announced his $3.35 billion investment.
Elon Musk immediately began soliciting feedback from Twitter users about potential moves, such as converting Twitter’s San Francisco headquarters into a homeless shelter and adding an edit button to messages, as well as allowing premium users automatic verification marks. Given that numerous celebrities with large followings rarely tweet, one tweet suggested that Twitter might be dying.
He is one of the few people who can fund a full takeover because he is dissatisfied with the power that comes with being Twitter’s largest investment. According to the Bloomberg Billionaires Index, he is currently worth almost $260 billion. Despite the fact that Musk is the world’s richest man, he has yet to reveal how he would come up with $43 billion in cash.
“This becomes a hostile takeover offer that will cost a significant amount of money,” said Neil Campling, Mirabaud Equity Research’s head of TMT research. “To fund it, he’ll have to sell a significant amount of Tesla shares or take out a large loan against it.”
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