Tesla CEO Elon Musk is offering to buy Twitter, saying the social media platform he has criticized for not living up to free speech principles needs to be transformed as a private company.
Twitter's board of directors is meeting at 10 a.m. Pacfic (1 p.m. EST) to discuss Musk's takeover offer, CNBC reports. Twitter's board includes Twitter CEO Parag Agrawal; Twitter co-founder and former CEO Jack Dorsey; Twitter former executive chairman Omid Kordestani; and Patrick Pichette, partner with Inovia Capital and former Google CFO.
At 2 p.m. Pacific (5 p.m. EST), Twitter is holding an all-hands meeting for its employees.
Twitter Inc. said in a regulatory filing on Thursday that Musk, currently the company’s biggest shareholder, has proposed buying the remaining shares of Twitter that he doesn’t already own at $54.20 per share, an offer worth more than $43 billion.
Musk called that price his best and final offer, although he provided no details on financing. The offer is non-binding and subject to financing and other conditions.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in the filing. “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
Twitter said it has received Musk's offer and will decide whether it is in the best interests of shareholders to accept or continue to operate as a publicly traded company.
Analyst Daniel Ives of Wedbush said in a client note that he believes “this soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company.” He thinks it would be hard for any other bidders or consortium to come forward and said Twitter’s board will likely be forced to accept Musk’s offer or start a process to sell the company.
Musk revealed in regulatory filings over recent weeks that he’d been buying shares in almost daily batches starting Jan. 31, ending up with a stake of about 9%. Only Vanguard Group’s suite of mutual funds and ETFs controls more Twitter shares.
The billionaire has been a vocal critic of Twitter in recent weeks, mostly over his belief that it falls short on free speech principles. The social media platform has angered followers of Donald Trump and other conservative political figures who’ve had their accounts suspended for violating its content standards on violence, hate or harmful misinformation. Musk also has a history of his own tweets causing legal problems.
After Musk announced his stake, Twitter quickly offered him a seat on its board on the condition that he not own more than 14.9% of the company’s outstanding stock, according to a filing. But he said five days later that he’d declined.
He didn’t explain why, but the decision coincided with a barrage of now-deleted tweets from Musk proposing major changes to the company, such as dropping ads — its chief source of revenue — and transforming its San Francisco headquarters into a homeless shelter. Musk left a few clues on Twitter about his thinking, such as by “liking” a tweet that summarized the events as Musk going from “largest shareholder for Free Speech” to being “told to play nice and not speak freely.”
Musk’s 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 tweeting has sometimes gotten him into trouble with the SEC and others.
Musk and Tesla in 2018 agreed to pay $40 million in civil fines and for Musk to have his tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at $420 per share. That didn’t happen, but the tweet caused Tesla’s stock price to jump. Musk’s latest trouble with the SEC could be his delay in notifying regulators of his growing stake in Twitter.
Musk has described himself as a “free speech absolutist” and has said he doesn’t think Twitter is living up to free speech principles — an opinion shared by followers of Donald Trump and a number of other right-wing political figures who’ve had their accounts suspended for violating Twitter content rules.
Shares of Twitter jumped 11% before the market open. The stock is still down from its 52-week high of about $73. Shares of Tesla, the electric vehicle manufacturer that Musk heads, slipped about 0.9%.
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