Tesla CEO Elon Musk offers to buy Twitter for $43bn

Published April 14, 2022
A file photo of Tesla CEO Elon Musk. — Reuters/File
A file photo of Tesla CEO Elon Musk. — Reuters/File

Tesla CEO Elon Musk is offering to buy Twitter, saying the social media platform he has criticised for not living up to free speech principles needs to be transformed as a private company.

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 realise 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 on Jan 31, ending up with a stake of about nine per cent. 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 of free speech principles. The social media platform has angered followers of Donald Trump and other far-right political figures who’ve had their accounts suspended for violating its content standards on violence, hate or harmful misinformation. Musk, who has described himself as a “free speech absolutist”, 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 does not own more than 14.9pc of the company’s outstanding stock, according to a filing. But the company 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 summarised 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, rivalling pop stars like Ariana Grande and Lady Gaga. But his prolific tweeting has sometimes gotten him into trouble with the US Securities and Exchange Commission (SEC) and others.

Musk and Tesla in 2018 agreed to pay $40m 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.

Shares of Twitter jumped 11pc before the market opened. 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 0.9pc.

Opinion

Editorial

Militancy redux
Updated 12 Aug, 2022

Militancy redux

There is fear and confusion all around, and it is for the state to bring clarity to the situation.
Distorting history
12 Aug, 2022

Distorting history

WHEN history is co-opted by ideologically overzealous elements, expect the facts to die a quick death, and...
Dengue danger
12 Aug, 2022

Dengue danger

WITH rains continuing across most of the country, a dengue outbreak can quickly become a major headache for health...
Khorasani’s killing
11 Aug, 2022

Khorasani’s killing

OMAR Khalid Khorasani, a dreaded TTP ‘commander’, lived by the sword and very much died by the sword. But beyond...
Gross overreaction
Updated 11 Aug, 2022

Gross overreaction

The government has already done considerable damage to itself with its indelicate handling of the situation.
Dadu deaths
11 Aug, 2022

Dadu deaths

DISEASES that are usually mild and preventable in countries with developed healthcare systems often prove to be...