The story of Elon Musk and Twitter is not over yet, but it can be argued that this is the climax of the Musk and Twitter saga that has been going on for the past few weeks. The billionaire and CEO of SpaceX and Tesla has now finally offered to buy social media behemoth Twitter.
The amount puts the value of each Twitter share at $54.20 and values Twitter at $43.4 billion (up from Twitter’s current market valuation of $37 billion.) Speaking of Twitter shares, they have risen considerably ever since this development was disclosed in an SEC filing. They jumped by nearly 12% in pre-market trading.
The price of $54.20 per share is a 54% premium over the day before he began investing in Twitter, and a 38% premium over the day before his investment was publicly announced. While this move is surprising, it is certainly a feasible move in terms of finances, given that Musk’s net worth is around $260 billion.
For his part, Musk called the all-cash offer his “best and final” one. If it was not accepted by the social media company, given that Musk said that he did not have confidence in management, nor did he believe that he could drive the necessary change in the public market, then the billionaire would need to reconsider his position as a shareholder.
This begs the question, was taking over Twitter the primary goal of Elon Musk ever since it was disclosed that he had bought a stake of 9.2% in Twitter? To refresh your memory, he had bought the 73.5 billion shares for nearly $3 billion. With this, he had effectively become the largest shareholder of Twitter, eclipsing former CEO Jack Dorsey, and was set to take a seat on Twitter’s board of directors?
The twist in the tale came later when Twitter CEO Parag Agarwal revealed that Musk will not be joining Twitter’s board.
Regarding the current development, Musk revealed in an email to Bret Taylor, Twitter’s chairman of the board that he had invested in Twitter as he believed in its potential to be the platform for free speech around the globe, and believed that free speech was a societal imperative for a functioning democracy. This is an area in which Musk has been rather critical – he even asked his followers over a poll if they believed that Twitter adhered to the statement that free speech was essential to a working democracy. An overwhelming majority voted “No.”
“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 email read, adding that he would unlock Twitter’s “extraordinary potential.”
In response, Twitter said that its board of directors 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.