By Aaron Miller-
Billionaire Elon Musk has offered to buy Twitter for $41.39bn, according to a regulatory filing.
The Tesla chief executive was sued on Wednesday after investors accused him of misleading statements that failed to make necessary disclosures to the SEC.
Undeterred by the legal suit, Musk proceeded to make a huge offer to the social media giant to fulfil his ambition of overhauling the social media platform which the world’s richest man says hampers free speech.
The “best and final” offer to buy Twitter Inc., was announced in a filing with the U.S. Securities and Exchange Commission on Thursday, after turning down a potential board seat at the company. He added: “Twitter has extraordinary potential. I will unlock it.
One of the platform’s most-watched firebrands, Musk often tweets out memes and taunts to @elonmusk’s more than 80 million followers.
The world’s richest person will offer $54.20 per share in cash, representing a 54% premium over the Jan. 28 closing price and a valuation of about $43 billion. The social media company’s shares soared 18% in pre-market trading.
The company’s shares were trading at $45.85 on Wednesday and were up to more than $50 a share in pre-market trading on Thursday.
“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 in a letter to Twitter chairman Bret Taylor.
“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form.
In the filing, he was quoted saying “this is not a threat, it’s simply not a good investment without the changes that need to be made”.
Musk said the company’s shareholders will “love” the deal due to its high price.
Musk already owns 73,486,938 Twitter shares, currently worth £3.3bn and has more than 80m followers.
If the irresistable offer is accepted by twitter, the billionaire entrepreneur will have the huge challenge of addressing many of twitters failings, including addressing hate speech and incitement of hatred, misogyny, and many other known malpractices on social media which Musk could, but to his peril, perceive as conflicting with free speech.
Neil Campling, from Mirabaud Equity Research, said: “The Elon ego has landed.
“This becomes a hostile takeover offer which is going to cost a serious amount of cash – aka he will have to sell a decent piece of Tesla stock to fund it – or a massive loan against it) and time.”
He said that if his offer was not accepted: “I would need to reconsider my position as a shareholder”.
A filing with the US financial regulator revealed text and/or voice messages from Mr Musk to Twitter’s board, showing that he had raised the idea at the weekend that the business should go private.
Mr Musk had been invited to join the board, but Twitter announced on Sunday he had decided against it.
In the messages, Mr Musk said he was not “playing the back-and-forth game” and insisted its shareholders would “love the high price” he was offering for the firm.
In the filing with the US financial regulator Mr Musk said: “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.”
Musk’s mighty offer to buy twitter follows a series of tweets in which he criticized the platform for stifling free speech in some cases.
In one of his tweets, he asked his followers if they thought Twitter was dying, pointing out that some of Twitter’s most followed accounts, including those of musicians Taylor Swift and Justin Bieber, rarely tweeted.
In his most provocative tweet, he posted a poll asking whether Twitter’s headquarters in San Francisco should be converted into a shelter for homeless people, adding: “no one shows up anyway”.
Musk is the chief engineer at SpaceX; early-stage investor, CEO, and product architect of Tesla, Inc.; founder of The Boring Company; and co-founder of Neuralink and OpenAI.
The entrepreneur and business magnate is worth an estimated net worth of around US$273 billion as of April 2022,[4] Musk is the wealthiest person in the world according to both the Bloomberg Billionaires Index and the Forbes real-time billionaires list.[5][6]