Alex Bruno
On Thursday, Twitter said it would seriously consider Tesla CEO Elon Musk’s “unsolicited, non-binding” offer to buy the microblogging site for more than $43 billion. The microblogging site stated in a statement that “the Twitter Board of Directors will carefully evaluate the proposal to decide the course of action that it feels is in the best interest of the Company and all Twitter investors.” Earlier in the day, Musk made a bid to purchase 100% of Twitter for $54.20 per share, a 54% premium over the company’s closing price on January 28, 2022, the trading day before Musk started investing.
This is a 38% premium over Twitter’s closing price on April 1, 2022, the trading day before Musk officially declared his interest in the company. “I invested in Twitter because I think it has the potential to become a global platform for free expression, and I believe free speech is a social requirement for a functioning democracy,” Musk said in the filing. “However, after making my investment, I’ve realized that the firm, in its present form, can neither prosper nor fulfill this social necessity. As a private firm, Twitter must be altered.”
Musk wrote to Twitter’s board of directors, stating that “in its present form, Twitter can neither prosper nor satisfy social imperatives.” “If the sale doesn’t work, I’ll have to reevaluate my position as a shareholder,” he continued, “since I don’t have faith in management and don’t feel I can make the required transformation in the public market.” Musk will not join the board of directors of Twitter, according to Twitter CEO Parag Agrawal, who said that “he feels it is for the best.”
Last week, the Indian-origin CEO announced that Musk had been named to the board of directors of the microblogging site. Musk, who paid roughly $3 billion for a 9.2% stake in the microblogging platform, is prohibited from purchasing more than 15% of the company’s equity.
Elon Musk’s proposal was rejected by Saudi Arabia’s Prince Alwaleed bin Talal, who said it didn’t “get near to the inherent worth” of the popular social media network.
The size of the wealthy Prince’s Twitter investment is unknown, but according to a 2015 regulatory filing, Alwaleed and his Kingdom Holding Company possessed a 5.2 percent ownership in the social media network.
In late 2017, the prince, along with other Saudi princes, was jailed in the Ritz-Carlton hotel in Riyadh for over three months as part of an anti-corruption sweep launched by the de facto Saudi ruler and Crown Prince Mohammed Bin Salman, which was widely perceived as a ploy to consolidate control. According to the Bloomberg Billionaires Index, Alwaleed is worth $16.5 billion. His 95 percent ownership in Kingdom Holding Company accounts for most of his fortune. Investors evaluated the news of the offer as Twitter’s stock fluctuated on Thursday. At 1:25 p.m. in New York, the stock was up 2.1 percent.
Source: Business Standard
