Twitter is grabbing the headlines thanks to the news that Elon Musk, the multi-billionaire owner of electric vehicle manufacturer Tesla, is offering to buy the company for around $43 billion (INR 4,300 cr). That values the shares, which are quoted on the New York Stock Exchange, at $54.20 each (around INR 4,135).
Musk says this will be his final offer – maintaining he won’t be drawn into a bidding war – and that he will consider his position as a Twitter shareholder if his offer is turned down. He bought a 9.2% stake in Twitter earlier this month.
The Twitter board will consider the offer and may decide whether or not to recommend Musk’s offer to its shareholders.
In a brief statement, it said: “Twitter, Inc. (NYSE: TWTR) confirmed it has received an unsolicited, non-binding proposal from Elon Musk to acquire all of the company’s outstanding common stock for $54.20 per share in cash.
“The Twitter 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.”
If the shares remain below the $54.20 level, there is a potential for anyone buying Twitter stock now to make a profit if Musk’s bid at that level is accepted. Of course, if someone were to buy at the current price and the deal did not go through and the price then fell, they would be left with a trading loss if they sold out.
Victoria Scholar at Interactive Investor commented: “This is a deeply hostile move from Elon Musk, who has threatened to ‘reconsider’ his 9.2% stake in the company if his 100% acquisition offer is rejected.
Perceived hostility between Musk and Twitter employees has arisen because the social media intervenes to moderate content, sometimes imposing temporary suspensions on members or flagging content it thinks is flawed or misleading. The Tesla boss sees himself as wholly committed to free speech without restraint.
Ms Scholar said:…