Musk said the cash offer was his “best and final offer,” according to the SEC filing, adding that if it’s not accepted he would have to reconsider his position as a shareholder.
The Tesla CEO sent an offer letter to the company Wednesday night, according to the filing.
“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 he sent to Twitter. “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.”
The letter was addressed to Bret Taylor, the chair of the Twitter board, not CEO Parag Agrawal, who assumed that title last fall. It concludes: “Twitter has extraordinary potential. I will unlock it.”
Twitter issued a statement Thursday confirming that it had received the offer. The company said its board would 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.”
But it will be difficult for Twitter to reject Musk’s bid at the price he is offering, said Dan Ives, tech analyst with Wedbush Securities.
“Musk is putting the Twitter board’s backs against the wall,” Ives said. “The premium is at a level that will be hard to see other bids occurring.”
But to get a return on a bid this high, Twitter would need to do more to bring in subscriber revenue and cut costs, Ives said. Musk’s commitment to use the company to promote greater free speech doesn’t do much, if anything, to increase its profitability.
“Musk making this about free speech is the exact opposite of what every other corporate raider would do about monetizing the company’s value,” Ives said. “It’s historic and bizarre at the same time.”
Musk has by far more Twitter followers than any other CEO with 81.6 million, and is a much more prolific tweeter than the handful of celebrities who have more followers.
Last week, Musk disclosed he had been buying shares of Twitter since late January, and that he had spent $2.6 billion to accumulated 73.1 million shares, which at the time represented a 9.1% stake, according to what the company had disclosed at that point about the number of shares that are held by investors.
But in February Twitter announced it planned to repurchase $2 billion worth of shares in an effort to raise its stock price. And on Thursday the company disclosed that there were 37 million fewer shares outstanding than previously indicated.
That reduction in total shares increased Musk’s stake to 9.6% without him having to purchase a single additional share. And it reduced the total value of the company by $2 billion based on Musk’s $54.20 offer price.
After Musk’s stock purchase disclosure, he initially accepted an offer of a seat on the board, an agreement that included a cap on his total investment in the company at 14.9%.
Musk had been unusually silent on his plans for Twitter in the days since then.
It’s very possible that Musk won’t need to sell Tesla shares and instead will be able to use them as collateral to borrow the money he needs to buy Twitter, Ives said. Musk’s Tesla shares are worth about $177 billion, even with the modest decline in premarket trading Thursday.
“Banks will be lining up to be part of the consortium of lenders to the world’s richest person,” said Ives.
Musk’s tweet about taking Tesla private, in which he said he had “funding secured” for the offer when he did not, got him in trouble with the SEC. He eventually had to give up the position as chairman of Tesla, and agree to have his tweets with material information about Tesla reviewed by other executives at the company.
Taking a company private, or keeping it private, reduces the oversight the watchdog agency has on its operations.
The price he suggested for Tesla at that time, $420 a share, was seen highlighting April 20, the unofficial holiday of marijuana enthusiasts. The $54.20 per share offer for Twitter also includes “4.20.”
— Brian Fung and Brian Stelter contributed to this article.
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