Hostile takeover —
“Free speech is a societal imperative for a functioning democracy,” Musk wrote.
Elon Musk on Wednesday offered to personally acquire Twitter in an all-cash deal valued at $43 billion. Musk laid out the terms of the proposal in a letter to Twitter Chairman Bret Taylor that was reproduced in an SEC filing.
Twitter confirmed receipt of the offer in a Thursday morning 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,” the company wrote.
Musk has been accumulating Twitter shares since January. Last week, he revealed that he had accumulated 9.2 percent of outstanding Twitter shares, making him the company’s largest shareholder.
After that revelation, Twitter offered Musk a seat on Twitter’s board in a deal that would have prohibited him from acquiring a majority stake. But Musk ultimately turned the offer down, preserving his option to buy more stock.
Technology “Free speech is a societal imperative”
Musk’s motives in acquiring Twitter are partly ideological. “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe,” Musk wrote to Taylor. “I believe free speech is a societal imperative for a functioning democracy.”
In the same letter, Musk wrote that “Twitter needs to be transformed as a private company.”
Musk says he lacks confidence in Twitter’s current leadership. So if his offer isn’t accepted, he may sell off his 9.2 percent stake.
On Twitter in recent days, Musk has been publicly musing about possible changes to Twitter. In a Twitter poll, he asked followers if they wanted an edit button. Seventy-three percent said yes—or rather, “yse,” since Musk appears to have deliberately misspelled the word.
As the sole owner of Twitter, Musk would have broad discretion to overhaul Twitter’s approach to content moderation, potentially allowing a lot of material that runs afoul of Twitter’s current rules. Musk would inevitably face pressure from Republicans to reinstate Donald Trump’s Twitter account.
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Musk is offering $54.20 per share, an 18 percent premium over Wednesday’s closing price. Musk notes that it’s also a 54 percent premium over Twitter’s share price on January 28, the day Musk started buying shares.
Musk is the world’s wealthiest person, with a net worth of around $270 billion, according to Forbes. He is offering to buy Twitter shares in cash, but the SEC filing notes that the deal is contingent on “completion of anticipated financing,” suggesting that he could borrow against his shares in Tesla or SpaceX to finance the deal.
Tim Lee was on staff at Ars from 2017 to 2021. In 2021, he launched Full Stack Economics, an independent email newsletter about the economy, technology, and public policy. You can subscribe to his newsletter here.
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