- Twitter stock jumped 12% in premarket trading on Thursday after Elon Musk offered to buy the company outright.
- The world’s richest person revealed his bid of $54.20 a share in regulatory filings the same day.
- He told the company’s shareholders: “Twitter has extraordinary potential. I will unlock it.”
Twitter stock jumped 12% in pre-market trading on Thursday after Elon Musk launched a bid to buy the social media company at $54.20 a share.
The world’s richest man revealed his intentions in a regulatory filing Thursday, saying he believes Twitter has untapped potential and that he can transform it as a private company.
The $54.20 price tag represents an 18% premium over Twitter’s Wednesday closing price of $45.85. It would value the company at about $43 billion.
It’s a 54% premium over the January 28 price, which was the day before the Tesla boss started investing in the company. And it’s a 38% premium over April 3’s price, the day before Musk’s investment was made public.
Twitter stock was up 12.24% to $51.46 in pre-market trading as of 6.44 a.m. ET, putting it on track for a major move at the opening bell. Tesla stock was down 0.96%, meanwhile.
Musk’s explained the rationale behind his move in a regulatory filing with the Securities and Exchange.
“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 said.
“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.”
He told shareholders: “Twitter has extraordinary potential. I will unlock it.”
Dan Ives, an analyst at Wedbush, said he thought the “soap opera” would ultimately end with Musk owning Twitter.
“The next step will be Twitter’s Board officially reviewing the Musk filing/letter and then it’s get-out-the-popcorn time as we expect many twists and turns in the weeks ahead as Twitter and Musk walk down this marriage path,” he wrote in a note to clients.
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