Elon Musk Could Buy Twitter: Everything You Need to Know – CNET

Billionaire Elon Musk has a big offer for Twitter.

Musk has proposed paying $54.20 for each share of the influential social media company, an offer that values Twitter at $43 billion. The entrepreneur, who runs Tesla, SpaceX and other companies, already owns more than 9% of Twitter. 

“I now realize the company will neither thrive nor serve [its] societal imperative in its current form,” Musk wrote in a letter to Bret Taylor, chairman of Twitter’s board of directors. “Twitter has extraordinary potential. I will unlock it.”

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The offer, which Musk called his “best and final,” underscores the roller-coaster relationship between the tech mogul and Twitter since he revealed his stake in early April. Musk is one of the social media company’s largest shareholders. He then turned down a seat on Twitter’s board of directors, fueling speculation that Musk would engage in a hostile takeover of the company. The Wall Street Journal and The New York Times, citing people familiar with the matter, reported that Twitter is moving closer to finalizing a deal with Musk to sell Twitter.

Here’s what you need to know about the ongoing saga between Twitter and Musk:

Why does Musk want to buy Twitter?

Musk, who has 83 million followers on Twitter, is an avid user of the service but also one of its loudest critics.

Musk tweeted a poll to his followers in March that asked whether users believed Twitter was protecting free speech. He said the poll results, in which roughly 70% of 2 million respondents answered “no,” would be “very important.” 

The guarantee of freedom of speech in the First Amendment to the US Constitution applies to the government censoring speech but not to companies such as Twitter, which have their own rules about what isn’t allowed on their sites.

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” Musk said in a follow-up tweet.

In his letter to Taylor, Musk said he invested in Twitter because he believes “in its potential to be the platform for free speech around the globe.” To accomplish his goal, Musk thinks, the public company needs to go private.

Democrats have criticized social media companies for not doing enough to crack down on harmful content such as hate speech and harassment, but conservatives claim their speech is being censored. Twitter has long denied allegations it censors conservatives. On Tuesday, Musk tweeted that he thinks social media policies “are good if the most extreme 10% on left and right are equally unhappy.” 

What has Twitter’s response been?

Twitter said in a press release it’s received the offer and the board 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.” On Friday, Twitter adopted a defensive tactic known as the “poison pill” that would make it tougher for Musk to increase his stake in the company. The shareholder rights plan doesn’t prevent the company from accepting an offer to buy the company or engaging with other parties, Twitter said.

Twitter CEO Parag Agrawal hasn’t commented publicly about Musk’s offer to buy Twitter, but he reportedly told employees that the company was still evaluating Musk’s offer and would make a decision “in the best interest of our shareholders.” 

Twitter co-founder Jack Dorsey tweeted on April 15 that “as a public company, twitter has always been ‘for sale.’ that’s the real issue.”

Twitter hasn’t said when it plans to make a decision but The Wall Street Journal reported a deal could be finalized as early as Monday.

How likely is it that Twitter will accept the offer?

Even though a deal between Musk and Twitter initially appeared unlikely, The New York Times reported that the 11-member board took the offer more seriously after Musk gave more details about how he would finance his offer.

Some of Twitter’s biggest investors think Musk’s offer is too low. Saudi billionaire Prince Alwaleed bin Talal said in a tweet that he doesn’t believe Musk’s offer “comes close to the intrinsic value of @Twitter given its growth prospects.” 

Fred Wilson, a venture capitalist and early investor in the company, tweeted that “Twitter is too important to be owned and controlled by a single person” and the platform should be decentralized.

Thoma Bravo, a private equity firm, is reportedly interested in buying Twitter as well, Reuters reported. Apollo Global Management is also thinking about participating in a Twitter bid, The Wall Street Journal reported last week.

Musk has also said he’s considering a type of public takeover bid known as the tender offer, through which he’d offer to buy stock from shareholders at a higher price of $54.20 per share, according to an SEC filing on Thursday. Owning stock comes with voting rights. He’s been hinting on Twitter that he’s thinking about a tender offer. Musk has tweeted “Love Me Tender,” a song released by singer Elvis Presley in 1956, and  “_______ is the Night,” a reference to author F. Scott Fitzgerald’s 1934 novel “Tender Is the Night.”

How would Musk pay for Twitter?

With a net worth of $270 billion, Musk is reportedly the richest person in the world, but questions still linger about how he would pay for Twitter.

In a TED talk  earlier this month, Musk said, “I have sufficient assets…” before switching thoughts.

In Thursday’s SEC filing, Musk said he’s secured about $25.5 billion in debt financing through Morgan Stanley Senior Funding and other financial institutions. Musk said he’s personally committed about $21 billion in equity financing

What happens if Twitter rejects the offer?

Musk made it clear in his letter to Taylor that if Twitter rejects the offer, he would reconsider his position as a shareholder in the company.

Ali Mogharabi, a senior equity analyst for Morningstar, said in a note earlier this month that the rejection could drive down the price of Twitter’s stock. Musk has also floated the idea of creating a new social media platform.

“If Musk’s offer is rejected, he could still attempt to raise the capital necessary to create a similar social media platform to compete with Twitter, although attracting millions of daily active users, as Twitter had at the end of 2021, would be a tough task,” Mogharabi wrote in the note.