This just landed on the Twitter’s SEC page from one Elon Musk:
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”). 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.
Yep, Musk has gone hostile on Twitter and is offering $54.20 per share which works out in total at roughly $43bn.
Offering $54 flat might have saved Musk approximately $200m but would also mean missing out on a cannabis joke. If Twitter shareholders say no, will he take his offer up to $69.42?
Apparently not. From a letter attached to the SEC filing directed to Twitter’s chair:
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.
Reaction wise, the first email to land is from Mirabaud analyst Neil Campling:
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. After all, Twitter has become a sprawling mess of a platform with no clearly defined USP, means of monetisation, strategy nor scale. Clearly there is no love lost between Musk and the CEO, so the CEO – who has only been in the job for a proverbial five minutes but has already made plenty of contradictory comments – will be tapping up his Linkedin connections for a job.
Is this about Musk’s vision for free speech? He has been vocally critical of Twitter’s moderation policies in recent weeks and how it is essential to a functioning democracy. [ . . . ] One thing’s for sure, Musk will likely be even freer with his own speech via the platform. Given his position at Tesla and, potentially, Twitter, what about corporate governance? Following SEC guidelines? Fiduciary duties?
Is this just another publicity stunt? Is this just another diversion tactic … don’t look over there (we are losing market share, our factory is still shut in China, hundreds of thousands of cars being recalled) but look over there.
At pixel time, Twitter’s up 11.8 per cent in pre-market to $51.25 and Tesla’s down nearly 1 per cent at $1,012.