Twitter said it was evaluating Musk's offer
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Author | Yao Yongzhe
Tesla CEO Elon Musk. Musk proposed a $43 billion acquisition to Twitter on Thursday. The billionaire entrepreneur said that only by going private can the social media develop into a platform for true freedom of speech.
"I think it's important to have a free platform that embraces all speech." Musk said this during a TED talk in Vancouver when asked about bidding on Twitter. Prior to that, Musk was already Twitter's second-largest shareholder.
On Wednesday, in a letter from Musk to Twitter's board, the offer was formally offered and made public in regulatory filings on Thursday, where he offered $54.20 a share 38 percent higher than Twitter's closing price on April 1. Twitter is a platform for short blog posts to communicate with and has become an important way for individuals to communicate directly with world leaders.
At TED late Thursday, Musk himself gave further explanations about the acquisition of Twitter, admitting that he was not sure if he could successfully complete the acquisition, but if Twitter rejected his offer, he had Plan B. However, Musk did not provide more details of the backup plan.
Musk revealed that if the acquisition succeeds, he will retain as many other shareholders as possible instead of becoming the sole owner of Twitter.
According to Forbes, Musk is currently the richest man in the world, with $273.6 billion in assets. He declined an invitation to join Twitter's board after disclosing his shares in Twitter on Saturday, a move analysts believe is indicative of his intention to takeover because having a seat on the board would allow him to hold no more than 15 percent of his shares.
Twitter has now confirmed that it has received an offer to takeover and said the board will review the offer. Sources revealed that Twitter is being at Goldman Sachs and Wilson. Sannier. Under the guidance of Goodrich and Rosati, Musk was evaluated for an acquisition offer.
According to sources quoted by the Wall Street Journal, Twitter is considering so-called "Poison Pill" to prevent Musk from significantly increasing the company's stake.
Twitter's stock price has fallen 2 percent after the news came to light, and investors weren't immediately convinced by Musk.
Musk hinted after his TED talk that he bypassed Twitter's board for an acquisition. He will make an offer to shareholders directly to acquire shares. He previously wrote on Twitter: "The act of not handing over this offer to shareholders for a vote is completely untenable." ”
Saudi Arabia's Prince Al Wadli is one of Twitter's largest and long-term shareholders. He said on Twitter that Musk's offer underestimated the company's price and therefore declined.
Musk told Twitter it was his "best and final offer" and said he would reconsider his investment in Twitter if the board refused.
"It's not a way to make money," Musk said in a TED talk.
"I have a strong intuition that having a trustworthy and broadly inclusive platform is extremely important for the future of civilization." Musk added.
Musk, a self-described "absolute speech liberal," has been critical of social media platforms and their policies. A recent nominal survey on Twitter asked clients if they believed it adhered to the principle of free speech.
Twitter banned the speech after twitter caused violence in the U.S. Capitol over remarks made by former President Trump during the election. Musk tweeted at the time: "A lot of people will be very unhappy that West Coast high-tech companies act as dictators of speech. ”
Employees are expected to attend a Twitter plenary session late Thursday to discuss the news of Musk's offer, some of whom are panicking about the impact Musk will have on content moderation, a source said.
Musk said U.S. investment bank Morgan Stanley is acting as a talent advisor for its proposal. Musk said he would finance the deal if it didn't go well, but he told TED viewers he "has enough assets" but didn't give a further explanation.
CFRA Research analyst Angelo Zino said Musk could finance the deal by debt and selling Tesla stock.
Musk sold more than $15 billion worth of Tesla shares last year, or about 10 percent of his stake in the electric car maker, to settle tax liabilities.
Twitter's user growth in these months has been lower than expected, which has sparked one of investors' growth prospects, even though Twitter is developing megaprojects such as audio chat rooms and newsletters.
Michael Hewson, principal market analyst at CMC Markets, said: "A big question for Twitter's board now is whether to accept a very generous offer to sell a business that has been underperforming and often indifferent to users. ”
According to people familiar with the matter, Twitter will not decide the final fate of Musk's invitation on Thursday. What the board is discussing is the parameters of the valuation process and will then ask its advisers to review Musk's offer and wait for the final result, the sources said.
Since joining Twitter in 2009, Musk has amassed more than 80 million followers and used it to make several announcements. Musk is bound by a 2018 settlement with the U.S. Securities and Exchange Commission that requires him to obtain pre-approval for some of his Twitter posts after tweeting that he had "secured funding" to take Tesla private.
"If he really wants to take Twitter private, his past conflicts with regulators may not pose a hurdle — but it could make potential sources of financing wary about providing cash for the deal — unless he's willing to pledge a majority of his Tesla shares as collateral for debt to hold Twitter shares," said Howard Fischer, a partner at Moses & Singer Law Firm and a former senior trial lawyer at the Securities and Exchange Commission.
Musk's move has also raised the question of whether other bidders will tweet.
Wedbush Securities analyst Daniel Ives wrote in the client report: "It is difficult for any other bidder/consortium to emerge and Twitter's board may be forced to accept this bid and/or run an active process to sell Twitter." ”
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