Elon Musk, the CEO of Tesla, has made an offer to buy Twitter, claiming that he is the best person to “unlock” the social media platform’s “amazing potential.”
Mr Musk made the stunning revelation that he would pay $54.20 per share for Twitter, valuing the company at almost $40 billion.
Mr Musk was recently revealed to be Twitter’s largest shareholder after amassing a sizable stake in the company.
“I would need to reevaluate my position as a shareholder,” he stated if his offer was not accepted.
In early trade, Twitter’s stock gained 5.3 percent to $48.32, before sliding back to more than $46.20 later.
A filing with the US Securities and Exchange Commission purported to indicate text and/or voice conversations from Mr Musk to Twitter’s board of directors, indicating that he had raised the notion of taking the company private over the weekend.
Mr Musk had been invited to join the board, but he declined on Sunday, according to Twitter.
Mr Musk wrote in the filing that he was not “playing the back-and-forth game” and that his offer was “a premium price, and your shareholders will adore it.”
He stated that if the acquisition did not go through, he would have to sell his shares.
“This isn’t a danger; it’s just not a good investment without the necessary modifications,” he continued
“This is a profoundly unfriendly action from Elon Musk, who has threatened to’reconsider’ his 9.2 percent interest in the company if his 100% buyout offer is rejected,” Victoria Scholar, head of investment at Interactive Investor, stated.
Mr Musk claimed he invested in Twitter because “I believe in its potential to be the venue for free speech around the globe, and I believe free speech is a societal requirement for a functioning democracy” in a filing with the US Securities and Exchange Commission.
“However, since making my investment, I’ve come to recognize that the company, in its current form, can neither prosper nor serve this societal necessity.” Twitter should be turned into a private firm.”
He added: “Twitter has extraordinary potential. I will unlock it.”
“The proposal will be carefully reviewed by the board of directors to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders,” Twitter said.
According to Forbes magazine, Mr Musk is the world’s richest man, with a net worth of $219 billion, owing mostly to his stake in electric vehicle maker Tesla. He is also the CEO of SpaceX, an aerospace company.
Wedbush Securities’ senior equity research analyst Dan Ives believes Twitter will be compelled to accept Mr Musk’s offer or find another buyer.
He stated, ” “In the next days, there will be a slew of issues about funding, regulation, and balancing Musk’s time (Tesla, SpaceX), but based on this filing, it’s a now or never offer for Twitter.
“We anticipate this soap opera will culminate with Musk buying Twitter in the end.”
