In a move we didn't expect, billionaire and Tesla CEO Elon Musk has offered to buy Twitter for somewhere between $41 and $43 billion.
Twitter is considering the offer, but hasn't said much more than that. But Musk has claimed he has some big plans for Twitter, if he gets hold of it
This unexpected comes mere days after the Musk rejected a board seat on Twitter. The whole process over the past few days has been bizarre, and this was not the next expected move from Musk.
As such, read on for a blow-by-blow account of the whole Twitter and Musk shenanigans leading up to this unexpected purchase offer.
So yeah, Elon Musk ants to buy Twitter. He's offering to take over the social media meets microblogging side for $41 billion.
"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," Musk said in a letter to Twitter Chairman Bret Taylor.
"My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder."
69.420% of statistics are falseApril 9, 2022
Somewhat ironically, Elon Musk has been very quiet about this bid to buy Twitter. Usually, he's a very active tweeter, sometimes offering insight and other times tweeting some bizarre thoughts.
Had Musk tweeted that he wants to buy Twitter, we may have called it nonsense But as he's gone down the regulatory filing route, there's more than a hint of legitimacy to all this.
I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.April 5, 2022
So how did Musk get to this point? Well he was due to take a seat on Twitter's board, which he revealed last week after contradicting a regulatory filing that said he was just a passive investor in Twitter.
On April 5, Twitter CEO Parag Agrawal tweeted that Musk would be appointed to the board. "Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board," Agrawal said.
"He’s both a passionate believer and intense critic of the service which is exactly what we need on Twitter, and in the boardroom, to make us stronger in the long-term. Welcome Elon!"
But that wasn't to be...
Most of these “top” accounts tweet rarely and post very little content. Is Twitter dying? https://t.co/lj9rRXfDHEApril 9, 2022
In the run up to Musk taking a Twitter board seat, he tweeted some criticizm of the social media site, noting that it's top 10 most followed accounts rarely posted content.
"Is Twitter dying?" the Tesla CEO asked.
Over the weekend, Musk then continued to tweet some rather crazy ideas about where Twitter could go and how it could be renamed Titter...yes really.
These tweets were then deleted, but not before the likes of the Wall Street Journal saw them.
Now oddball tweeting is kinda Musk's MO, but this seemed to rub the Twitter bigwigs up the wrong way.
Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here. pic.twitter.com/lfrXACavvkApril 11, 2022
Seemingly as a result of such tweeting from Musk, Parag Agrawal got involved and tweeted a screenshot of a statement to Twitter as a company that said Musk has decided he won't be joining Twitter's board after all.
Agrawal's full message is as follows:
"Elon Musk has decided not to join our board. Here's what I can share about what happened.
"The Board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward. The board offered him a seat.
"We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same day that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input.
"There will be distractions ahead, but our goals and priorities remain unchanged. The decisions we make and how we execute is in our hands, no-one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building."
Now Musk didn't say why he wouldn't be joining Twitter, though the idea of a background check would seemingly suggest that Twitter's board may not have been so hot on Musk ideas and stream of thought on what Twitter should do next.
According to Reuters, this move to ponder joining a board and then not wasn't seen as breaking any securities laws and influencing the stock price of Twitter, which is a publicly traded company.
"Merely being extended an offer to join the offer to board, contemplating doing so and deciding not to is not a violation of securities laws," Jacob Frenkel, a former enforcement attorney at the U.S. Securities and Exchange Commission, told Reuters.
But the whole process has been some what tempestuous to say the least.
As so that brings us to today, where Musk's offer to buy Twitter has been made public. And in the letter to Twitter chairman Bret Taylor, Musk seems to have decided that an overhaul of Twitter is needed.
"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," he wrote.
"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."
Taking Twitter private is a big move, but it's not beyond the means of Musk, who's wealth sits around some $260 billion, Bloomberg reports. And currently, Twitter's value sits at around $43 billion; hardly small potatoes but affordable if you're a billionaire many times over.
"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," Musk said in the letter to Bret Taylor, published by the SEC.
"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 did note that this offer isn't intended as a hostile take over of Twitter. But his letter does have a nugget of ultimatum to it, with him seemingly hinting that he may withdraw his 9.2% investment from the social network.
"This is not a threat, it's simply not a good investment without the changes that need to be made," he said in the SEC filing.
Currently, Musk's Twitter shares are valued at some £3.3 billion. So pulling out that investment could mess with Twitter's share price.
While Musk has a high value, if he has to go down the hostile takeover route, he may have to offload some Tesla shares or borrow a lot of money against the company.
This was observed by Mirabaud Equity Research's Neil Campling, who said: “The Elon ego has landed.
“This becomes a hostile takeover offer which is going to cost a serious amount of cash – aka he will have to sell a decent piece of Tesla stock to fund it – or a massive loan against it) and time.”
I made an offer https://t.co/VvreuPMeLuApril 14, 2022
Ah here we go: Musk has finally tweeted about the offer to by Twitter.
The reaction to this has been mixed, with some replies to the tweet expressing mirth or praise, while others don't think it would be the best investment. But more than anything people are curious as to what Musk will do with Twitter if he actually manages to buy it.
And that's a question we've been pondering, as Tom's Guide is all about what such things mean for you, dear readers.
If Musk does get hold of Twitter, then we suspect it'll be business as usual for some time, as trying to rapidly change a social platform with some 400 million users isn't really a thing. But changes could be afoot, if and when Musk get his hands on the Twitter tiller.
Musk talked a lot about free speech, which is obviously important for a social platform. However, there's a fine line between free speech and spouting things like racial abuse or bigoted views; after all free speech comes with a slice of responsibility.
So we'd hope that if Musk takes the lead at Twitter that he keeps the latter in mind. Twitter can already be a minor hell-site of abuse, trolls and unsavoury and unnuanced views.
Twitter has officially responded to Musk's buyout offer, saying it'll consider it but hasn't offered much more insight.
"Twitter today confirmed it has received an unsolicited, non-binding proposal from Elon Musk to acquire all of the Company's outstanding common stock for $54.20 per share in cash," the company said in a press release.
"The Twitter Board of Directors will 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."
Unsurprisingly, all this has meant Twitter's share price took a jump up, which is good news if you own some or have investments in it via a tech fund portfolio.
A the time of writing, Twitter is sitting at $48.76 per share, so one can easily see why Musk's offer of $54.20 per share is hefty.
And that's all we know so far. Now we'll play the waiting game to see if Twitter does indeed agree to be purchased by Musk and if it's something he'll fully pursue.
With his fingers in plenty of pies, from Tesla to SpaceX, one might suggest Musk keeps his hands off Twitter. But the move has been made, and time will tell what happens next.