Tesla CEO Elon Musk is offering to buy Twitter just days after he decided not to join the social media company's board of directors.
Twitter Inc. said in a regulatory filing on Thursday that Musk had provided the company with a letter the day before with an offer to buy the remaining shares. The 50-year-old business mogul, who is currently the world's richest man, already owns 9% of Twitter stock - making him the largest shareholder.
In Wednesday's letter, Musk offered $54.20 per share of Twitter's stock, which is $41.3 billion, and said it would be his final offer. Musk's offer is slightly more than Twitter's current market cap value of $36.7 billion.
Musk said in the motion, "I invested in Twitter because I believe in its potential to be the platform for free speech around the world, and I believe free speech is a social imperative to a functioning democracy." " “However, since making my investment, I have now realized that the company will neither thrive nor meet this social imperative in its present form. Twitter needs to be turned into a private company."
Musk revealed in recent weeks that he had been buying shares in almost daily batches since January 31, prompting Twitter to quickly give Musk a seat on its board on the condition that he own more than 14.9% of the company's outstanding stock. is not owned. for a filing. But Musk withdrew from the deal and began a series of deleted tweets about improving the company -- prior to this takeover attempt.
Board members filed a lawsuit Tuesday on behalf of Twitter's shareholders taking issue with its jump in the 9% stock, arguing that Musk did not file Schedule 13 with the SEC within the required time and that Twitter instead continued to accumulate shares. "By failing to disclose his ownership stake in a timely manner, Musk was able to acquire Twitter shares at little cost during the class period," the lawsuit states.
Twitter is up more than 12% in pre-market trading following the billionaire's statement. Wedbush Securities analyst Dan Ives said Thursday that the move to power would likely force the Twitter board to "accept this bid and/or run a proactive process to sell Twitter."
Ives said, "There will be many questions about the funding, regulatory, balance of (Tesla, SpaceX) timing of Musk in the coming days, but ultimately based on this filing it is now or never a bid to accept Twitter." " "The next step will be the board of Twitter officially reviewing the Musk filing/letter and then exiting popcorn time as we expect many twists and turns in the coming weeks as Twitter and Musk go down this marriage path. "
Musk is the CEO and founder of Tesla and the chief engineer and CEO of SpaceX. According to both the Bloomberg Billionaires Index and the Forbes Real-Time Billionaires List, he is listed as the world's richest person.
Below is the full text of the letter sent by Musk to Twitter, per the SEC filing:
Bret Taylor
Chairman of the Board,
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.
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.
Elon Musk