Elon Musk has launched a $43 billion hostile takeover bid for Twitter, the social network that the eccentric billionaire behind Tesla uses as a hobby to connect with his 81 million followers — saying he believes the platform is essential to the functioning of democracy.
Elon Musk offers to buy Twitter
“My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said. “I don’t care about the economics at all.”
The offer to take the company private in a securities filing dated Wednesday for $54.20 a share marks a major escalation in a weeks-long battle by Musk to gain influence at the social media company, following his acquiring a more than 9 percent stake and flirting with a seat on the board. In the filing, he called it a “best and final offer.” If it is not accepted, he added, “I would need to reconsider my position as a shareholder.”
Twitter confirmed in a news release Thursday that it had received an “unsolicited, nonbinding proposal” from Musk. “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.”
Musk took to Twitter midday Thursday, however, to say he thinks the decision should be put to the shareholders. It would be “indefensible” not to do so, he said, before posting a Twitter poll on the issue.
Absolutely. It would be utterly indefensible not to put this offer to a shareholder vote. They own the company, not the board of directors.
— Elon Musk (@elonmusk) April 14, 2022
Musk, who is CEO at electric car company Tesla and at his space company SpaceX, is known for somewhat brash business declarations, some of which don’t pan out. Musk famously tweeted that he had “funding secured” to take Tesla private in 2018 at $420 per share, but was fined by the Securities and Exchange Commission when that deal failed to materialize. He also frequently announces products like the Cybertruck on a faster time table than possible.
The price of the takeover bid ― $54.20 per share ― may be a veiled reference to that previous episode that landed Musk in trouble with the securities regulators.
While Musk is the richest man in the world, valued at $259 billion according to the Bloomberg Billionaires Index, some analysts questioned whether he had enough liquid assets to purchase Twitter. Much of his wealth is tied up at his companies. At the TED conference Thursday, Musk assured the audience he did.
“I could technically afford it,” he said, adding, “I do think this will be somewhat painful and I’m not sure that I will actually be able to acquire it.”
Musk unloaded billions worth of Tesla stock beginning late last year, and began purchasing shares of Twitter at the end of January, according to financial filings. Musk had said he intended to sell 10 percent of his shares in the electric car company, the most valuable automaker. Tesla’s valuation of more than $1 trillion dwarfs that of the social media network he is seeking to purchase, around $34 billion.
Musk plans to allow the maximum allowable number of shareholders to stay on in the private company, he said.
Some shareholders tweeted their disapproval of the plan. Saudi billionaire Prince Alwaleed bin Talal, tweeted Thursday that he rejected the offer, saying he didn’t think it came ” close to the intrinsic value” of the company.
Musk fired back on Twitter, asking the prince to disclose how much of Twitter the Kingdom of Saudi Arabia owned and for him to spell out the country’s views on “journalistic freedom of speech.”
U.S. intelligence has concluded that Saudi Crown Prince Mohammed bin Salman ordered the killing of Washington Post contributing columnist Jamal Khashoggi, a critic of the Saudi government, at the Saudi consulate in Istanbul in 2018.
Interesting. Just two questions, if I may.
How much of Twitter does the Kingdom own, directly & indirectly?
What are the Kingdom’s views on journalistic freedom of speech?
— Elon Musk (@elonmusk) April 14, 2022
Meanwhile, some investors and analysts who cover his two main ventures are concerned that a Musk takeover could prove a distraction from his ambitions to revolutionize the automotive and space industries. Musk has others, too: tunneling firm The Boring Company and the company Neuralink, which seeks to implant computer chips in people’s brains.
At the TED conference, Musk referred to Twitter as “the de facto town square” and expressed what he saw as the site’s importance to democracy and the future of civilization. He said that while the process could be messy, he believes he has the funds to make it happen. Musk said he wants Twitter’s algorithm to be “open source,” echoing a poll he conducted on the website March 24. His comments suggested that he believes Twitter is emphasizing or even suppressing certain content.
Musk said any such should be “made apparent so anyone can see [what] actions have been taken.” Twitter affixes labels to add context to posts it deems misleading, but says it does not limit content based on a person’s “views or opinions.”
In a letter to Twitter Chairman Bret Taylor, Musk said he believes the company has the “potential to be the platform for free speech around the globe.”
Free speech is a “societal imperative for a functioning democracy,” he added. But since his investment, he has come to “realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
The SEC filing also included what appeared to be text and voice messages associated with the discussion. In a voice message that appeared to be from Musk, the Tesla CEO said, “I am not playing the back-and-forth game … I have moved straight to the end,” adding of his offer that “It’s a high price and your shareholders will love it.”
He said he’d have to reconsider his position in Twitter if his deal were not accepted.
“This is not a threat, it’s simply not a good investment without the changes that need to be made,” he said, according to the filing.
On April 5, Twitter surprised employees and investors by announcing that Musk would join its board of directors. Days later, however, Twitter chief executive Parag Agrawal announced that Musk had backed out.
“There will be distractions ahead, but our goals and priorities remain unchanged,” Agrawal wrote. “The decisions we make and how we execute remain unchanged. The decisions we make and how we execute is in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”
Joining the board would have “handcuffed” him from fully acquiring the company, noted CFRA equity researcher Angelo Zino in an email to The Post.
Board membership also would bestow Musk with certain fiduciary responsibilities, such as requiring him to act in the best interests of the company.
Over the weekend, Musk unloaded a series of sharply barbed tweets at the company. “Is Twitter dying?” he asked early Saturday morning. He went on to question Twitter’s most popular users, its San Francisco headquarters and its process for authenticating accounts. Before he was done, he made a lewd joke about changing the company’s name.
Musk’s takeover bid was met with mixed reactions Thursday.
Some right-wing politicians cheered Musk’s takeover attempt, playing into a broader backlash against the social media platform since it permanently banned former president Donald Trump in early 2021.
Rep. Lauren Boebert (R-Col.) said Musk deserves a medal for his “patriotic and necessary” fight for free speech. Nigel Farage, a British broadcaster and former politician who was a leader of the Brexit movement, called Musk’s takeover bid the best news for free speech in years.
“The panic coming from blue-check media after Elon Musk’s offer to buy Twitter is the fear of losing the ability to censor conservatives online and silence free speech they don’t like,” tweeted Rep. Darrell Issa (R-Calif.).
Others appeared concerned that Musk could acquire too much control over a platform that many view as essential to free speech. Fred Wilson, a New York-based venture capitalist, said the platform is “too important” to be owned and controlled by a single person.
“The opposite should be happening,” Wilson tweeted. “Twitter should be decentralized as a protocol that powers an ecosystem of communication products and services.”
Musk on Thursday at the TED conference attacked the Securities and Exchange Commission, a common foe since his 2018 spat with the regulatory agency over the tweet that cost him $20 million and his board chairmanship of Tesla.
“I was forced to concede to the SEC unlawfully, those bastards,” he said, echoing an argument he made in a recent letter to a federal judge.
Reed Albergotti contributed to this report.
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