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Musk Attempts Hostile Takeover of Twitter

April 14, 2022 by Madeline Hughes
Musk Attempts Hostile Takeover of Twitter
Elon Musk founder, CEO, and chief engineer/designer of SpaceX speaks during a news conference after a Falcon 9 SpaceX rocket test flight at the Kennedy Space Center in Cape Canaveral, Fla, Jan. 19, 2020. (AP Photo/John Raoux, File)

WASHINGTON — Elon Musk wants to buy Twitter for $43 billion, according to papers filed with the U.S. Securities and Exchange Commission.

“Twitter has extraordinary potential. I will unlock it,” Musk wrote in a letter to Twitter Chairman Bret Taylor. However, if the company does not accept his bid, he said, “I would need to reconsider my position as a shareholder.”

This comes just days after reneging on a board seat offered to him after he purchased 9.2% of the social media company. Musk announced his purchase of the company’s shares on April 4, sending stock prices soaring from $39.31 on April 1 to a high of $50.98 on April 5, the day Twitter announced a board seat for Musk.

Musk was supposed to take his seat  on the board Saturday, however, that morning he opted out, according to Twitter CEO Parag Agrawal. To accept a seat on the board Musk would have had to agree to only buying 14.9% of the company, according to the company’s agreement.

“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company,” Musk wrote in the SEC filing.

“As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my 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 wrote.

This hostile takeover of the company doesn’t come as a surprise to Aron Solomon, chief legal analyst for Esquire Digital.

It was always going to be a “poor cultural fit between the board of Twitter and someone who wants to destroy what Twitter is today,” Solomon said Thursday.

Currently owning about 9% of the company, stock prices are expected to take a nosedive if Musk follows through with his threat to sell, Solomon explained.

Musk was legally required to share news of his ownership on March 24 and is facing a potential class-action lawsuit from former Twitter stock owners who sold between that date and when he formally announced, Solomon added.

However, Solomon said, the real question is: How much of Twitter will Musk acquire and what will he do with it?

Musk likely won’t succeed in total private ownership, Solomon said, “because people won’t sell to him, some people.”

Solomon, himself an avid Twitter user, explained “under Elon Musk Twitter would much more closely resemble Reddit 2.0 than the Twitter we know” because of Musk’s calls for more “free speech,” he said.

The recent news coverage of Musk buying up the social media company’s stock created more press for Musk, who has been sharing about his companies Tesla and SpaceX between tweets about Twitter, Solomon pointed out.

“This has been a publicity stunt for him,” Solomon said.

Madeline can be reached at Maddie@thewellnews.com.

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