Tesla CEO Elon Musk has launched a hostile attempt to buy Twitter for $43 billion, saying it needs to be transformed into a private company to become a platform for free speech.
Musk, the company’s largest individual shareholder, offered to acquire all of Twitter’s remaining common stock at $54.20 per share in a “non-binding proposal” he sent to Twitter’s Board Chairman Bret Taylor on Tuesday.
In his letter to Taylor, the self-described free speech absolutist said he had invested in Twitter as he believed in its “potential to be the platform for free speech around the globe”.
Musk said he realised since making his investment that Twitter in its current form would neither “thrive nor serve” as a tool for free speech — and so it “needs to be transformed as a private company”.
The SpaceX founder’s purchase offer was at a 54 per cent premium over the day before he began investing in Twitter “and a 38 per cent premium over the day before my investment was publicly announced”.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder. Twitter has extraordinary potential. I will unlock it,” he said.
Late in the night, Twitter confirmed it had received “an unsolicited, non-binding proposal” from Musk and said it would carefully “review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders”.
In texts to Taylor, Musk — the world’s richest person with a $273.6 billion fortune according to Forbes — said his position on withdrawing his investment was “not a threat”.
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder. This is not a threat, it’s simply not a good investment without the changes that need to be made. And those changes won’t happen without taking the company private,” he said in the texts.
Musk had also told Taylor that he was not “playing the back-and-forth game”. “I have moved straight to the end. It’s a high price and your shareholders will love it.”
Both the letter and the texts are a part of exhibits placed before the US Securities and Exchange Commission.
Earlier this month, Musk revealed through an SEC filing that he had bought a 9.2 per cent stake, worth nearly $3 billion, in Twitter. This had made him the biggest shareholder in the company, ahead of the 8.8 per cent stake held by the Vanguard Group, 8.4 per cent held by Morgan Stanley, and 2.2 per cent stake held by Twitter co-founder Jack Dorsey.
A day later, on April 5, Twitter’s chief executive officer Parag Agrawal had said in a note on the platform that Musk would join the company’s board.
On April 11, Agrawal sent out another note saying Musk had decided against this. He had also hinted of “distractions ahead” and that the company executives should “tune out the noise” and stay focused on the work.
The flip flop on Twitter comes at a time when its annual revenue as of December 2021 stood at $5 billion. The company has targeted achieving $7.5 million in revenue by 2023. If the deal goes through, it could give the platform more financial muscle to compete with other platforms such as Facebook and Instagram.
Twitter has expanded into newer products such as audio tweets and spaces. The funds from the stake buy may help the platform expand and improve the quality of these services.