Elon Musk sends $43bn tweet to unveil Twitter bid

The Twitter board said it will ‘carefully review’ the proposal from the Tesla billionaire

 Twitter logo on smartphone and Elon Musk in the background

It is being called the $43bn tweet: “I made an offer,”  Elon Musk tweeted, as he unveiled a bid to buy the whole of Twitter.

Musk unveiled his offer a few days after the purchase of 9% of the stock in the company co-founded by Jack Dorsey.

The Twitter board’s response was immediate: “We 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’s dream, according to his letter to the company, is to delist Twitter from the New York Stock Exchange and “transform” it into a private company, or more precisely, “the platform for free speech around the globe. Twitter has extraordinary potential. I will unlock it,” he wrote.

However, some critics observed that despite his current $273.6bn fortune, he could not have liquidity enough to support his unsolicited bid. It was suggested the move was a “pump and dump” attempt to gain from the possible resale of the 9% of Twitter he is currently holding.

Elon Musk’s bid

Musk sent a non-binding proposal to acquire all of the outstanding Twitter common stock at $54.20 per share, representing a 54% premium over the closing price of Twitter shares as of the 28th of January 28, 2022, or the trading day before Musk began investing in Jack Dorsey’s creation, and a 38% premium over the closing price of the Twitter shares on April 1, 2022, or the trading day before Musk’s investment in Twitter was publicly announced.

“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,” he said.

“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” he wrote in the letter sent to the Twitter board, claiming that it is not a threat, and saying Twitter shareholders would love the offer.

“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,” he said.

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“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.” 

Twitter investors take hostile action

However, Twitter investors seem not to reciprocate his feelings, as a class action has reportedly begun in the US against Musk for failure to promptly disclose his shares.

According to news reports, the suit seeks class-action status on behalf of investors who sold Twitter stock during that time and lost out on gains they would have realized had Musk disclosed his stake earlier, as US law describes. After Musk disclosed his stake, Twitter shares rose 27%, from $39.31 to $49.97.

On the other hand, Twitter, Inc. confirmed it has received the unsolicited, non-binding proposal from Elon Musk to acquire all of the company’s outstanding common stock for $54.20 per share in cash.

Twitter price on the stock market

The response of the markets was cautious, as observers claimed that Musk may not have liquidity enough to support his bid, with his move being instead substantially a bluff to gain on the sale of his 9% in the future.

Chris Bloomstran, president and chief investment officer of Semper Augustus Investments Group, said: “Elon does not have the cash to finance a $43bn acquisition. He’s either provided cover for liquidating another sizable portion of extremely overvalued Tesla shares or will sell his Twitter position at a large short-term gain. Mastery of both sides of the pump and the dump.” 

Twitter shares, at the time of writing, were changing hands at $47.14 trading around 2.7% higher in the last 24 hours but touched the 48.50 level soon after the opening bell.

Tesla share are trrading instead down by 3.3% at $987.75.

Source: https://currency.com/elon-musk-sends-43bn-tweet-to-unveil-twitter-bid

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