Elon Musk has offered to buy Twitter for $41.39 billion, just days after becoming the company's biggest shareholder.
The billionaire proposed yesterday to acquire all of the social media company’s outstanding common stock for the price of $54.20 a share, according to a Securities and Exchange Commission (SEC) filing.
Musk said that this represents a 54% premium over the closing price of the common stock on 28 January, 2022, and a 38% premium over the closing price on 1 April, 2022, the day before his investment into Twitter was publicly announced.
If the transaction is completed, Twitter would be de-listed from the New York Stock Exchange and become a private company.
“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 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.”
Musk said this is his best and final offer, and if it isn’t accepted he would need to reconsider his position as a shareholder in the company.
“Twitter has extraordinary potential. I will unlock it,” said the billionaire.
In a script from Musk added to the filing, it revealed that he believes the company needs to be private to go through the changes that he believes need to be made. After spending the past few days thinking this over, he decided to try acquire the company and take it private.
Musk refuses to play a back-and-forth game and claims to have moved straight to the end of the deal. “It’s a high price and your shareholders will love it,” he added.
If the deal doesn’t work, given that he doesn’t have confidence in management or believes he can drive the necessary change in the public market, he would have to reconsider his position as shareholder.
"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," said a spokesperson from the company.
The Tesla CEO revealed on 4 April that he had acquired a 9.2% stake in Twitter, which has caused one shareholder to sue the billionaire, according to The Guardian. Federal trade laws require investors to notify the SEC after surpassing a 5% stake in a company within 10 days.
However, Musk acquired his shares on 14 March but didn’t make this information public until 4 April. During that time, the lawsuit alleges he was able to buy additional shares at a deflated price.
The lawsuit seeks class action status on behalf of investors who sold their stock during the period and lost out on gains they would have made if Musk had disclosed his stake earlier.
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Zach Marzouk is a former ITPro, CloudPro, and ChannelPro staff writer, covering topics like security, privacy, worker rights, and startups, primarily in the Asia Pacific and the US regions. Zach joined ITPro in 2017 where he was introduced to the world of B2B technology as a junior staff writer, before he returned to Argentina in 2018, working in communications and as a copywriter. In 2021, he made his way back to ITPro as a staff writer during the pandemic, before joining the world of freelance in 2022.