Elon Musk, the world’s richest man, held a Twitter poll asking users if they felt Twitter stood for “free speech.”
Though Musk’s polls are usually fun and games — this poll has become the root of something completely different (and serious.)
When a meaningful majority of users voted “no,” he spent over $2.8 billion to acquire nearly a tenth of the social media site.
Musk was invited to join the board in an amicable way. He agreed. And then, for some reason, things went sideways — Elon Musk ended up not joining the Twitter board.
Seems he had bigger plans than owning a single seat on the Twitter board… he wants all of them. Musk tendered an offer to acquire Twitter for $43 billion today.
In his letter, attached as Exhibit B to the 13-D/A filed today, Musk says that he spent “the past several days … thinking this over” and that he does not “… have confidence in management nor do I believe I can drive the necessary change in the public market.”
The deal would see Musk pay $54.20/share to take Twitter private, which is “a 54% premium over the closing price of the … [stock] … the trading day before the Reporting Person began investing in the Issuer.”
Musk’s action also triggered the share price to move north, which brought an onslaught of buying. One of those big buyers was Vanguard, which upped its position to become Twitter’s largest shareholder.
However, Twitter’s stock sitting at just $47 in after hours, investors don’t seem confident about Musk’s propensity to acquire the company. He observes that he has hired Morgan Stanley as his financial advisor, giving this deal some teeth. However, there’s healthy skepticism about how he will finance the deal.
Speculation aside, if he did make such an acquisition, it is believed Musk would need to borrow roughly $36 billion to complete the transaction. Musk would presumably have to sell some of his $170 billion worth of Tesla, or put together a consortium of investors who can help close the deal.
Without others in the ring, the “best and final” offer that Musk has presented doesn’t stand even a fair chance of success. Robert Schiffman, a Bloomberg Intelligence senior credit analyst, says that the multiple conditions give the deal “a low probability of success.”
But “low probability of success” has never stopped Musk before, who has spent billions in pursuit of once-thought delusions. Those electric vehicle and space-faring delusions are now reality, and even if Plan A fails, Musk shared that there’s always a “Plan B” which might include “keep[ing] as many as 2,000 existing Twitter investors.“
As of this writing, Twitter’s CEO Parag Agrawal has only indicated that “the company was still evaluating a $43 billion offer by Elon Musk to buy the company and take it private.“ He made the comments at a company all-hands today, while Musk speculated at a TED Talk that he’s not sure he’ll succeed.