After days of letting the world dangle by a string amid speculation of his intentions concerning the social media giant Twitter, Elon Mush revealed the end game on Thursday.
“I made an offer,” he tweeted as he announced his intent to buy up all of Twitter’s stock, linking to a Securities and Exchange Commission filing that begins with standard bureaucratic language and closes with quintessential Musk.
Musk currently owns 9.2 percent of Twitter stock in a deal announced earlier this month. Since that purchase, Musk has ruminated online about Twitter and its potential while the financial and technology worlds have waited to learn his plans.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
“On April 13, 2022, the Reporting Person delivered a letter to the Issuer (the “Letter”) which contained a non-binding proposal (the “Proposal”) to acquire all of the outstanding Common Stock of the Issuer not owned by the Reporting Person for all cash consideration valuing the Common Stock at $54.20 per share (the “Proposed Transaction”),” the filing states as it explained that Musk will be paying anyone who sells their stock to him a bonus over what it has been worth.
“This represents a 54% premium over the closing price of the Common Stock on January 28, 2022, the trading day before the Reporting Person began investing in the Issuer, and a 38% premium over the closing price of the Common Stock on April 1, 2022, the trading day before the Reporting Person’s investment in the Issuer was publicly announced.”
According to Marketwatch, the offer was an 18 percent increase over the stock’s value on Wednesday, which sent it up 12.2 percent in pre-market trading. (According to CNN, the “$4.20” part of the offer is a reference to the “420” slang term for marijuana.)
Once the dry language required was complete, Musk attached a communication to Twitter Board Chairman Bret Taylor.
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“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 stated.
“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.”
“As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% 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,” Musk declared.
Then follows a section labeled “Send via text”:
“As I indicated this weekend, I believe that the company should be private to go through the changes that need to be made. After the past several days of thinking this over, I have decided I want to acquire the company and take it private. I am going to send you an offer letter tonight, it will be public in the morning. Are you available to chat?”
Then comes a section of Musk verbiage under the heading “Best and Final.”
“I am not playing the back-and-forth game. I have moved straight to the end,” the filing stated. “It’s a high price and your shareholders will love it.”
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 stakeholder,” he wrote.
“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,” Musk wrote.
Musk had initially purchased his stock as a passive investor, but then filed a new document stating Musk “may engage in discussions with the Board and/or members of the Issuer’s management team concerning, including, without limitation, potential business combinations and strategic alternatives, the business, operations, capital structure, governance, management, strategy of the Issuer and other matters concerning the Issuer.”
Musk now “may express his views to the Board and/or members of the Issuer’s management team and/or the public through social media or other channels with respect to the Issuer’s business, products and service offerings,” according to his updated filing.
Musk had already decided not to take a seat on Twitter’s board of directors, which would have limited him to ownership of 14.9 percent of the company’s stock. The action left the door open for him to pursue a hostile takeover, commentators had noted.
“Without that limit, Musk could now — in theory — pursue a hostile takeover by buying the company outright. That’s a move his extraordinary wealth comfortably enables him to do,” Fortune reported.
“This now goes from a Cinderella story with Musk joining the Twitter board to likely a Game of Thrones battle between Musk and Twitter,” said Dan Ives, a Wedbush analyst who covers Tesla, Forbes reported.