The saga between Twitter and Tesla chief Elon Musk continues to unfold. Over the Easter weekend, the entrepreneur proposed to buy the social media company. Musk said in a filing with the US Securities and Exchange Commission that he is offering to buy 100% of Twitter for US$54.20 per share in cash, a 38% premium over the price on 1 April, the day before his investment was publicly announced. "My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder," he said in the filing.
Musk currently holds a 9.2% stake in Twitter and said he invested in the company as he believes in its potential to be "the platform for free speech around the globe. "I believe free speech is a societal imperative for a functioning democracy. Twitter has extraordinary potential. I will unlock it," he added.
Twitter was quick to react, announcing on 15 April that its board of directors has unanimously adopted a limited duration shareholder rights plan following what it called "an unsolicited, non-binding proposal to acquire Twitter".
The Rights Plan is intended to enable all shareholders to realise the full value of their investment in Twitter. According to Twitter, the Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the board sufficient time to make informed judgments and take actions that are in the best interests of shareholders. At the same time, private equity firm Thoma Bravo also expressed interest in acquiring Twitter. Citing its sources, Reuters reported that the acquisition would rival Tesla's.
Meanwhile, Twitter CEO Parag Agrawal reportedly allayed employees' fears recently by assuring them that the company is not being "held hostage" by news of Musk's offer. The Straits Times said Agrawal urged employees to "remain focused", adding that "we as employees control what happens".
Musk's takeover plan came shortly after former Twitter shareholders sued Musk for failing to disclose his stake in the company at the time of required action. According to the lawsuit, Musk did not disclose his 9.2% stake in the company until 4 April. When he finally did, the company's shares rose from a closing price of US$39.31 per share on 1 April to close at US$49.97 per share on 4 April, an increase of about 27%.
As a result, investors who sold shares of Twitter stock between 24 March, when Musk was required to have disclosed his Twitter ownership, and before the actual 4 April disclosure, missed the resulting share price increase as the market reacted to Musk's purchases.
Before that, Musk stirred up much chatter online when news broke that he won't be joining Twitter's board. This came days after Agrawal tweeted on 5 April that the Tesla chief was being appointed to its board. Regarding Musk no longer joining Twitter's board, Agrawal said in a tweet on 11 April that he believes "this is for the best" and that the company has and will always value input from its shareholders whether or not they are on its board.
According to The Wall Street Journal , some changes Musk said he would make to Twitter include softening the platform's stance on content moderation, shifting its business model to focus more on subscriptions, including an edit button for tweets, providing authentication check marks to users who play for subscription service Twitter Blue, and taking the social media company private.
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