According to The Wall Street Journal, Twitter’s board is reviewing Elon Musk’s AU$59 billion (US$43 billion) buyout offer after he declared that he had secured finance for the purchase. Both parties are scheduled to meet later today. According to the article, Twitter, which first seemed uninterested in the plan when Mr. Musk originally revealed it earlier this month, is now taking a “new look at the offer and is more inclined than previously to want to negotiate.”
Mr. Musk officially rejected to join Twitter’s board of directors, reversing the company’s statement that he would be joining in light of his recent purchase of Twitter shares, which made him the company’s biggest shareholder. Following that, he launched an unexpected hostile takeover proposal, prompting Twitter’s board to enact a “poison pill,” effectively prohibiting Mr. Musk from purchasing more than 15% of the firm by imposing prohibitively costly penalties.
Mr. Musk is said to be framing Twitter’s choice to other shareholders as a yes-or-no issue, whether it accepts or rejects his aggressive takeover attempt. Twitter, on the other hand, is said to be exploring alternative possibilities, such as keeping the door open to potential bids or discussing conditions other than money. Mr. Musk recently revealed that he has obtained funding for the transaction for $64 billion (US$46.5 billion).
Mr. Musk is the world’s wealthiest man, having founded or co-founded firms such as PayPal, Tesla, and SpaceX. Despite its massive cultural impact, Twitter pales in contrast to digital behemoths like Facebook and Google. According to Twitter, there are 217 million monetizable daily users,’ compared to 1.79 billion on Facebook. Meta, Facebook’s parent company, has a market capitalization of $532 billion USD, compared to $37 billion for Twitter.
Mr. Musk has repeatedly chastised Twitter for what he sees as a lack of respect for freedom of speech. After making the hostile takeover offer, Mr. Musk wrote to Twitter’s chairman, Bret Taylor, saying, “I invested in Twitter because I believe in its potential to be the platform for free expression throughout the world.” “I think that free expression is a basic need for a healthy democracy.”
After Twitter announced Mr. Musk’s appointment to its board of directors, he gave a TED lecture criticizing the company’s “black box” algorithm as being anti-freedom of expression.
“But, in general, it won’t be flawless, as I said, but I believe we want it to give the impression and reality that speech is as free as practically feasible.” And if someone you don’t like is permitted to say something you don’t like, that’s a positive indicator of free speech.” He chastised the company’s management for this apparent flaw.
In his letter to Mr Taylor, he added, “Since making my investment, I now see the firm can neither grow nor satisfy this social necessity in its present form.” “Twitter should be turned into a private firm.” He is the tenth most followed Twitter account, and his tweets often impact markets.
After tweeting that he would be taking Tesla private at $420 per share (a number commonly associated with cannabis consumption and a favorite of Elon Musk’s – his bid for Twitter values each stock at $54.20), the US Securities and Exchange Commission fined Elon Musk $40 million USD and forced him to resign as chairman of Tesla. The statement left investors perplexed, causing stock prices to plummet.