Michelle Chapman and Matt O’Brien
Tesla CEO Elon Musk is proposing to buy Twitter, saying the social networking platform he criticized for not complying with the principles of free speech needs to be turned into a private company.
Twitter Inc. reported in regulations on Thursday that Musk, now the company’s largest shareholder, has offered to buy the remaining shares of Twitter, which he does not yet own, at $ 54.20 per share, which is more than $ 43 billion.
Musk called the price his best and latest offer, though he did not provide details on funding. The offer is not mandatory and is subject to funding and other conditions.
“I have invested in Twitter because I believe it can be a platform for freedom of speech around the world, and I believe that freedom of speech is an imperative of society for a functioning democracy,” Musk said in a statement. “However, after I have made my investments, I understand that the company will neither prosper nor serve this public imperative in its current form. Twitter needs to be turned into a private company. ”
Twitter said it had received an offer from Mask and would decide whether it was in the interest of shareholders to accept or continue to operate as a public 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 believes other contenders or consortiums will find it difficult to speak, and said the Twitter board is likely to be forced to accept Mask’s offer or begin the process of selling the company.
In recent weeks, Musk has revealed in regulatory documents that he has been buying shares in almost daily batches since Jan. 31, bringing his share to about 9%. Only a set of mutual funds and ETFs Vanguard Group controls more shares of Twitter. A lawsuit filed Tuesday in federal court in New York alleges that Musk illegally delayed the disclosure of his stake in the social media company so he could buy more shares at lower prices.
In recent weeks, the billionaire has been a vocal critic of Twitter, largely because of his belief that it does not conform to the principles of free speech. The social media platform has angered followers of Donald Trump and other far-right politicians whose accounts have been suspended for violating standards of content of violence, hatred or harmful misinformation. Musk has called himself an “freedom of speech absolutist,” but is also known for blocking other Twitter users who doubt or disagree with him.
After Musk announced his stake, Twitter quickly offered him a seat on the board provided he did not own more than 14.9% of the company, according to the document. But five days later the company said he refused.
He did not explain why, but the decision coincided with a series of tweets removed from Mask that suggested major changes to the company, such as abandoning advertising – its main source of income – and turning its San Francisco headquarters into a homeless shelter .
Twitter didn’t go as well as its competitors on social media, and lost money last year. The company reported a net loss of $ 221 million over 2021, largely due to a settlement of a lawsuit filed by shareholders who said the company had misled investors as to how much its user base grew and how much users interacted with its platform. Its co-founder Jack Dorsey resigned as CEO in late November and was replaced by new CEO Parag Agraval.
More than 81 million followers of Mask on Twitter make him one of the most popular figures on the platform, competing with pop stars such as Ariana Grande and Lady Gaga. But his fruitful tweets sometimes caused him problems with the U.S. Securities and Exchange Commission and others.
Musk and Tesla in 2018 agreed to pay $ 40 million in civil fines and for Musk to approve his tweets to corporate attorneys after he tweeted that he has the money to make Tesla private at $ 420 per share. That didn’t happen, but the tweet caused a jump in Tesla’s share price. Mask’s latest problem with the SEC could be its delay with notifying regulators of a growing stake in Twitter.
Both of his comments in 2018 about Tesla’s private attitude of $ 420 per share, as well as his latest bid to make Twitter private at $ 54.20 per share, seemed to jokingly refer to the number 420, a slang reference to marijuana.
Twitter shares rose about 4% in the morning auction. Shares are still falling from a 52-week high of about $ 73. Shares of Tesla, an electric vehicle maker led by Musk, fell about 3%.