Elon Musk and Twitter
Roger Stringer • April 16, 2022
3 min read
Elon Musk, in a letter to Twitter chairman Bret Taylor and filed with the SEC:
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.
As of April 4th 2022, Musk already owns 9.1% of twitter shares, and turned down a seat on their board which would have limited him to being allowed to own no more than 15% of the company, he did say yes at first, then backtracked and said no.
The day after the SEC filing, the Twitter board responded with a poison pill. This is basically the board’s way of saying, “Thanks, but no thanks.”
The poison pill consists of a new “shareholder’s rights plan” to give certain shareholders the right to purchase more stock if Musk or another buyer attempts to seize control. And it signals that Twitter’s board intends to fight Musk’s bid to take sole ownership of the company.
Also, Musk isn’t trying to buy Twitter to make money, he wants to open source the company’s algorithm, and frame the whole takeover as a crusade to protect free speach.
If this doesn’t pass, then he’s also threatened to pull his shares due to a lack of confidence in the company’s current leadership, which could see Twitter’s share price tank for a little bit before going back up.
But if the proposal does pass, we could also see a number of accounts leaving the platform in protest as well, so should be interesting.
Update: in a deal valued at $44 billion, Musk and the board have reached a deal that, if it goes through, will see him as the new owner.