Tesla CEO Elon Musk is making his “best and final” offer to buy 100 percent of Twitter in an updated 13D filed Thursday with the SEC. He’s offering $54.20 per share in cash.
Naturally, Musk had to sneak a “420” into the offer.
Musk is offering 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 proposal was delivered in a letter to Twitter on April 13th. Musk says Twitter must go private to undergo changes that need to be made.
“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,” said Musk in a letter sent to Twitter chairman Bret Taylor. “Twitter has extraordinary potential. I will unlock it.”
“I would need to reconsider my position as shareholder,” says Musk if his offer is not accepted.
Twitter issued a press release confirming the offer, saying, “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 board reportedly met at 10AM ET to discuss the offer, although it is unclear whether a decision was reached. Following the board’s meeting, word leaked out that it is not interested in Musk’s offer, and may use a “poison pill” strategy to prevent Musk from attempting a hostile takeover as well. The company’s reportedly planning to address Musk’s offer at a 2PM PT / 5PM ET all-hands meeting as well.
At 10AM PT / 1PM ET, Musk gave a free, live TED Talk where he talked about his goals for Twitter as well, saying he isn’t in it for the money, expressing a belief that Twitter should “open source the algorithm,” and describing how he thinks Twitter’s long-awaited edit button should work. You can read our summary of the highlights here. He also claimed, without evidence, that the SEC lied about Musk not having the “funding secured” to take Tesla private back in 2018.
This morning, Twitter shares were up over 13 percent pre-market on the news of Musk’s offer, but closed down 0.77 percent. Tesla shares were initially down 1.5 percent on fears that Twitter’s number one fan — who already leads Tesla, SpaceX, The Boring Company, and Neuralink — might become distracted by his new pet, and closed down 3.66 percent for the day. Musk once told Twitter co-founder and ex-CEO Jack Dorsey that it’s a bad idea to run two companies simultaneously.
The will he / won’t he buy Twitter saga began in earnest when it became clear, just ten days ago, that the world’s richest man purchased a 9.2 percent stake in the company. Soon after Twitter announced that Musk would be appointed to its board, only for that to fall through just a few days ago, prompting Twitter CEO Parag Agrawal to tell staff, “there will be distractions ahead.”
A hostile takeover will certainly be distracting for everyone involved.
Below is the full text of the letter sent by Musk to Twitter, per the SEC filing:
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.
Update 9:18AM ET: Added news of the Twitter board’s planned meeting to discuss the offer.
Update, 4:07PM ET: Added details from Musk’s TED Talk and some possible leaks from Twitter’s board of directors.