Elon Musk never ceases to astound stock market enthusiasts and the general public. He continues to make headlines with his tweets; however, his tweets were not just memes and taunts this time. He began with a tweet directed at Twitter at the end of March.
At the time, it appeared to be one of his usual whims, but on April 4, 2022, the Tech tycoon revealed owing 9.2% of Twitter’s stake – making him the company’s largest shareholder.
Soon after, he was offered a seat on the board, which he initially accepted before announcing that he would not join it. Taking a seat on the board would have prevented him from attempting to take over the company.
Now he has said in his SEC filing that the company “should be private to go through the changes that need to be made” in filings to the US Securities and Exchange Commission.
According to a 13D filing, billionaire Musk has offered to buy Twitter for $54.20 per share in cash. This represents an 18.2% premium over the previous day’s closing price of $45.85. Musk’s bid would value Twitter at $43.39 billion, based on 800.64 million shares outstanding as of February 10.
Moreover, Musk’s offer price of $54.20 per share represents a 38% premium to Twitter’s close on April 1, the last trading day before the Tesla CEO’s more than 9% stake in the company was made public.
Twitter shares were trading 10% higher at $50.75 at the time of writing.
“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 said in a letter to Twitter Chairman Bret Taylor.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk said.
“Twitter has extraordinary potential. I will unlock it.”
If the offer is not accepted, Mr. Musk has suggested that he sell all of his shares.
Furthermore, a Twitter shareholder has sued Musk for failing to disclose his 9.2% stake in the company on time. According to US regulations, when a person’s stake in a publicly-traded company exceeds 5%, they must notify the Securities and Exchange Commission (SEC).
Musk purchased Twitter stock on March 14 but did not disclose it until April 4. As a result, Musk was able to purchase Twitter shares at a lower price, as the revelation could have caused the price to skyrocket.