Elon Musk made an offer to purchase Twitter for $43 billion, arguing that the social network has great potential and will be responsible for unlocking it. A few days ago he took over 9.2% of the company and, although he initially joined the board, he decided not to, and it was speculated that the decision would be linked to the possibility of a takeover bid, which has now become a reality.
The purchase offer is $54.20 per share, 54% more than its value on January 28 and 38% more than its value on April 1. The proposal was delivered in a statement to Twitter’s board yesterday, April 13. It also indicates that the social network must stop listing on the stock exchange in order to make the necessary changes. In the event of non-acceptance of the offer “he will reconsider his position as a shareholder”, explains his message.
The value of the offer, $54.20 per share, includes a 420 in the figure, referring to the code in the cultivation of cannabis, referring to its consumption. In the old days Elon Musk posted a tweet offering to buy all shares of Tesla for $420. The message led to him being sued by the United States Securities and Exchange Commission (SEC).
After the revelation of the letter sent by Elon Musk a Twitter with its total purchase intention of the social network, the actions increased by 13%. While the actions of You’re here fell by 1.5%. Mainly out of fear that the CEO of the company will be too distracted by this possible acquisition.
Musk has more than 80 million followers on the social network. Use your profile as official communication channel, not only on a personal level, but also of the companies he founded or currently leads. Being practically the only spokesperson for some of them, in particular You’re here. All this mixed with opinions, memes, answers and fights with politicians and other public figures. From time to time, he also posts controversial posts which even landed him in serious trouble and legal action.
Elon Musk can pull off a hostile takeover of Twitter, but it won’t be easy
Elon Musk has the financial muscle to launch a hostile takeover bid on Twitter and take control of the entire social network. He currently has a fortune of around $260,000 million, according to the index of Bloomberg. Meanwhile, the social network has an approximate valuation of $37 trillion, based on the current market share price.
But that doesn’t mean the purchase will be a straightforward process for Musk. To achieve this, you will need to sell a significant portion of the shares of You’re here, where much of his fortune resides. Or take out a really big loan. According to information published by Bloomberg, the executive has contracted consulting services from Morgan Stanley.
Additionally, Twitter’s takeover bid will raise significant doubts and questions from investors in other companies led by Elon Musk, including SpaceX and Tesla.
That said, more than one expert considers the offer to purchase the whole, at $54.20 per share, too low. Just a year ago, Twitter stock was around $70, says Adam Crisafulli of Vital Knowledge in a financial analysis published shortly after the announcement of the takeover attempt. “The shareholders will accept it.”
The statement sent by Elon Musk to Twitter proposing the total takeover of the social network
This is the statement sent by Elon Musk to the board of directors of Twitter, proposing the purchase of the entire social network. As part of the proceedings, due to their listing on the stock exchange, it has been made public as a relevant fact.
Chairman of the Board of Directors,
I invested in Twitter believing in the platform’s potential to drive free speech around the world. And I believe that freedom of expression is a social imperative for a healthy democracy.
But, since I made my investment, I realized that the business is not going to thrive or fulfill its social function in its current state. Twitter must delist and become a private company.
Accordingly, I propose to buy 100% of Twitter for $54.20 per share. 54% more than the value of the stock when I started investing and 38% more than the value the day my investment was publicly announced. My offer is the best I can make and it is final. If it is not accepted, I will have to reconsider my position as a shareholder.
Twitter has extraordinary potential and I will unlock it.