Billionaire Elon Musk surprised everyone again when he made an offer to buy Twitter social network for up to 43 billion USD. Previously, this tweet-crazy billionaire also owned 9.2% of Twitter shares at the beginning of this April.
In a letter to Twitter Chairman Bret Taylor, Musk said:I now realize the company would neither grow nor serve its social consciousness in the current model. Twitter has extraordinary potential. I will open for it.”
The offer was called “the best and the last” by Mr. Musk for the social network. In fact, with 9.2% of shares holding, Mr. Musk is currently one of the largest shareholders of this company. But recently, he refused to sit on the Twitter Board of Directors, making people more concerned about the possibility of a complete takeover of this company.
Why does Mr. Musk want to buy Twitter?
With 81 million followers, and countless daily tweets, Mr. Musk can be said to be one of Twitter’s most avid users. But at the same time he is also one of the service’s biggest critics.
In March, Mr. Musk made a probing tweet asking his followers if they believed Twitter was protecting freedom of expression. The results showed that about 70% of the 2 million people surveyed answered “No”.
The First Amendment of the US Constitution applies to government censorship measures but not to companies like Twitter, which have their own rules about what is allowed on their sites.
In the next tweet Mr Musk said: “Treating Twitter as a public square and failing to adhere to the principles of free speech would undermine its democracy. What to do now?“
In the letter to Taylor, Mr Musk said he invests in Twitter because he believes in “its potential to become a platform for free speech globally.” To achieve this goal, Mr. Musk thinks the public company needs to go private.
How does Twitter respond?
This past Sunday, Twitter CEO Parag Agrawal warned his employees about “distraction is coming“but did not comment publicly on Mr. Musk’s offer. He said the company is still evaluating Mr. Musk’s offer and will make a decision.”in the best interests of shareholders.”
In its press release, Twitter said it had received an offer and that the panel would “carefully review the proposal to determine the course of action they believe is in the best interest of the company and Twitter’s shareholders.”
Will Twitter accept Musk’s offer?
Some analysts say this is unlikely. Ali Mogharabi, senior analyst at Morningstar, said in a note on Thursday that the probability of Twitter accepting the offer is less than 50%.
Wedbush Securities analyst Ygal Arounian said it’s likely Twitter will look for other buyers.
“In our view, this deal will not be made at this price and the Twitter Board of Directors will not consider the offer or Mr. Musk must lead a change in the company in the best interest. for the company and its shareholders.”
Some major Twitter investors also think that Musk’s price is too low. Saudi billionaire Prince Alwaleed bin Talal said he did not believe Mr. Musk’s proposal.Get close to Twitter’s intrinsic value with its growth prospects.”
Fred Wilson, a venture capitalist and early investor in the company said: “Twitter is too important for one person to own and control it” and that the platform should be decentralized.
In fact, Musk’s suggested $54.2 per share price is nearly 38% higher than Twitter’s stock price on April 1.
How will Mr. Musk pay for Twitter?
With a net worth of up to $264.9 billion, Musk is currently considered the richest person in the world, but there are still many questions about how Musk will pay for Twitter?
The Wall Street Journal reported that Musk could sell his shares in Tesla or SpaceX or borrow money by mortgaging shares of those companies. However, neither of those options is financially ideal.
In the letter to Taylor, Mr. Musk also emphasized that, if Twitter rejected the offer, he would reconsider his position in the company. In his note, Mogharabi also said that, if Twitter rejects Mr. Musk’s offer, it is likely that the stock price will drop.
During a TED Talk on Thursday, Musk said he has a “plan B” if his proposal is rejected, but did not specify what it would be.
Refer to CNET