Billionaire Elon Musk has offered to buy Twitter for $54.20 per share in cash.
Recently, Elon Musk decided not to join Twitter Inc.’s board of directors, Chief Executive Parag Agrawal said, a dramatic reversal that cast new uncertainty over the relationship between the social-media platform and its largest shareholder.
The world’s richest man will pay $54.20 per share in cash, representing a 54% premium over the Jan 28. closing price and a value of about $43 billion. The social media company’s shares soared 18%.
“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,” Musk says in the filing.
“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.”
Musk, 50, announced the offer in a filing with the U.S. Securities and Exchange Commission on Thursday. The billionaire, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4.
The executive is one of Twitter’s most-watched firebrands, often tweeting out memes and taunts to @elonmusk’s more than 80 million followers. He has been outspoken about changes he’d like to consider imposing at the social media platform, and the company offered him a seat on the board following the announcement of his stake, which made him the largest individual shareholder.
After his stake became public, Musk immediately began appealing to fellow users about prospective moves, from turning Twitter’s San Francisco headquarters into a homeless shelter and adding an edit button for tweets to granting automatic verification marks to premium users. One tweet suggested Twitter might be dying, given that several celebrities with high numbers of followers rarely tweet.
Musk can afford it. He’s currently worth about $260 billion according to the Bloomberg Billionaire’s Index, compared with Twitter’s market valuation of about $37 billion.
In a letter to Twitter’s board, Musk said he believes Twitter “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company”
The takeover is unlikely to be a drawn out process. “If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” said Musk.
The $54.20 per share offer is “too low” for shareholders or the board to accept, said Vital Knowledge’s Adam Crisafulli said in a report, adding that the company’s shares hit $70 less than a year ago.
Musk has hired Morgan Stanley as his adviser for the takeover. The offer price also includes the number 420, widely recognized as a coded reference to marijuana. He also picked $420 as the share price for possibly taking Tesla private in 2018, a move that brought him scrutiny from the SEC.
Musk’s 81 million Twitter followers make him one of the most popular figures on the platform, rivaling pop stars like Ariana Grande and Lady Gaga. But his prolific tweeting has sometimes gotten him into trouble with the SEC and others.
Musk and Tesla in 2018 agreed to pay $40 million in civil fines and for Musk to have his tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at $420 per share. That didn’t happen but the tweet caused Tesla’s stock price to jump. Musk’s latest trouble with the SEC could be his delay in notifying regulators of his growing stake in Twitter.
Musk has described himself as a “free speech absolutist” and has said he doesn’t think Twitter is living up to free speech principles — an opinion shared by followers of Donald Trump and a number of other right-wing political figures who’ve had their accounts suspended for violating Twitter content rules.