The billionaire executive has recently become one of the company's largest shareholders. Now he says he wants to buy the whole thing and change how it handles speech.
Elon Musk's quote on Twitter could have serious implications for political discourse around the world.
Elon Musk's bid on Twitter could have a serious impact on political discourse around the world.
For the past two weeks, Elon Musk has made it clear that he wants to own a portion of Twitter. First, he disclosed that he bought 9 percent of the company. Then he toyed with joining its board of directors. And then he backtracked, tweeting a string of insults about Twitter to his 81 million followers. But on Wednesday night, he made the boldest move ever: He said he wanted to buy out the entire company.
Mr. Musk's unsolicited bid, which could be worth more than $40 billion, could have a major impact on political discourse around the world as he strongly supports free speech and has since removed the posts and asked users to has been banned.
Twitter said in a statement that it would "carefully review the proposal." But after a board meeting that began Thursday morning and lasted several hours, Twitter executives and directors seemed up for battle. They were dodging investors against Mr Musk's plans, and indicated he would have to spend billions more if he was to own the company.
Twitter is also considering a corporate defense strategy to deter Mr Musk. It is weighing in on a so-called poison shot, a maneuver to thwart unwanted takeover offers by making Target's shares more expensive, said two people who were familiar with the matter but could not speak for the company. .
Mr Musk said that if he succeeds in acquiring Twitter, he intends to ease the company's moderation policies and make public its algorithms for ranking content, which control what millions of people see in their Twitter feeds. does.
"Twitter has become a de facto town square, so it's really important that people have a reality and a perception that they are able to speak freely within the confines of the law," Musk said in an interview on Thursday. TED Conference in Vancouver, British Columbia.
Conservatives, who complain Twitter is biased against him, celebrated Mr Musk's proposal. “Musk has made clear that in order to save, Twitter needs a wholesale teardown to the foundation – its leadership must be removed,” said former President Donald J. Said Jason Miller, a longtime ally of Trump, who was banned from Twitter. in 2021. Mr Miller is also the chief executive of Getr, a right-wing Twitter alternative.
Jason Miller, a longtime adviser to former President Donald J. Trump, founded a right-wing alternative to Twitter last year called Getr. Credits ... Sam Hodgson for The New York Times
But it was unclear whether Mr Musk's takeover bid and plans to turn publicly traded Twitter into a private company would work, and he provided few details about how he would pay for it. Some investors and Wall Street analysts said their offer of $54.20 per share was too low, and that they would need to go for at least $60 per share to appeal to shareholders. That would be 25 percent more than the share price when Mr. Musk announced this month that he had acquired a 9 percent stake in Twitter.
"You're not in some garage sale bidding on the lamp," said Brent Thiel, an equity analyst at Jefferies. "It's a service that's beloved by many people around the world, and you just can't do these quick tasks."
Some shareholders also rejected Mr Musk's offer. Saudi Arabia's Prince Al Waleed bin Talal, who described himself and the group he represents as one of Twitter's largest and most long-term shareholders, said in a tweet that Twitter had to decline the offer. because it was not enough to reflect the "internal". Given the value of Twitter given the growth potential." Others said the offer was substantial but that Mr Musk's proposed changes could provoke an advertiser exodus and hurt the value of the company.
Twitter's share price was down 1.7 percent at the end of trading Thursday, closing at $45.08 -- far below what Mr. Musk offered.
Mr Musk, who is already chief executive of electric car maker Tesla and rocket company SpaceX, was clear that his bid could fail. "I think it will be somewhat painful, and I'm really not sure I'll be able to achieve that," he said. But he pressed Twitter's board for a shareholder vote, saying in a tweet that doing so otherwise would be "completely unforgivable."
A Twitter spokesperson said the board will "carefully review the proposal to determine the course of action, which is in the best interest of the company and all Twitter shareholders."
It's a common tactic being considered by Twitter to avoid the poison pill. This essentially floods the market with new shares for an acquisition target or allows existing shareholders other than the potential acquirer to purchase shares at a discount – making an acquisition more expensive.
Should Twitter take such measures, Musk could take his bid directly to shareholders with a so-called tender offer. If they like Mr. Musk's offer, they can sell their stock to the billionaire, allowing them to regain control of the company.
The board is also looking at soliciting offers from other companies that want to acquire Twitter, one of the people familiar with its plans said, another common move among acquisition targets. It is not clear whether Twitter has contacted anyone yet.
A deal could require Musk to receive $15 billion to $20 billion in debt financing, said Dan Ives, an analyst at Wedbush Securities. Although Mr. Musk is the richest man in the world, most of his wealth is tied up in shares of Tesla.
Twitter may question Mr Musk's ability to finance the deal or claim it undermines the company. The offer is a 54 percent premium over the share price the day before I started investing in the company at the end of January. But Twitter shares traded higher than Mr Musk's bid for much of last year.
When Mr Musk announced his stake in Twitter, he was welcomed by several board members, including Twitter co-founder Jack Dorsey. Twitter offered Mr Musk a seat in his boardroom, a move that executives hoped would deter him from publicly criticizing the company. But the reception quickly deteriorated. Mr. Musk turned down a board seat.
By Wednesday, Mr Musk was ready to reveal his next move. In a message to Twitter's chairman of the board, Brett Taylor, Mr Musk said: "I believe in its ability to be the platform for free speech around the world, and I believe that free speech is a functioning democracy. There is a social imperative to do so," according to a filing with the Securities and Exchange Commission that was later made public. "Twitter needs to turn into a private company."
Mr. Taylor, co-chief executive of Salesforce, has served on Twitter's board since 2016, when Salesforce considered buying Twitter. Mr. Taylor joined Salesforce a year later, when it acquired his company, Quip.
Another important board member is Egon Durban, co-head of Silver Lake, a private investment firm. Mr. Durban joined Twitter's board in 2020, as part of a deal the company struck with another active investor, Elliott Management, that wanted to shake up leadership. Mr Dorsey is friends with Mr Musk, but he is set to leave the Twitter board next month.
Mr Musk did not say exactly what he would do with the product on Twitter. But in private conversations, he has proposed a version of Twitter where moderating offensive content is a thing of the past, according to a person who has spoken with Mr Musk in recent days.
Twitter's board met on Thursday and appears to be taking a stand against Mr Musk's offer. Credits ... Cass Clifford for The New York Times
But that vision sheds light on the details. When challenged about how Twitter should deal with violent or repressive speech, Mr Musk has been dismissed. He proposed limiting "crime" tweets in accordance with US law during his TED interview on Thursday.
Twitter forbids various forms of speech on its platform, including spam, violent threats, coordinated propaganda campaigns, and the sharing of personal information. It has also cracked down on misinformation about election results and the Covid-19 pandemic.
Many Twitter employees have vociferously opposed Mr Musk's involvement in the company since his investment was announced in early April, arguing that it would change the company's culture and lead to a host of issues such as bullying, threats and misinformation on the platform. Will damage your efforts to control problems. Others have noted that he is not always up for free speech, and has cracked down on the account following the movements of outspoken Tesla employees and their private jets.
At an emergency all-hands company meeting on Thursday afternoon, Twitter's chief executive, Parag Agarwal, sought to calm employees and said "I don't believe we are being held hostage by Mr Musk". He was asked why he was not tweeting more to counter the constant criticism of Musk.
The employees put pressure on Mr. Agarwal as to when and how the board would decide. He scoffed, saying the board would be stricter but he couldn't share more about the process. He warned employees that they would hear more about the board's final decision on Twitter than on leadership.
Mr. Agarwal also faced questions about what the acquisition by Mr. Musk would mean for the company's culture and employees' stock compensation. Mr. Agarwal urged the employees to focus on the things under their control and said that he would do the same.
“I believe that Twitter stands for more than one human being, any human being, me or anyone else and their values. Twitter stands for open, public conversation,” he said. is best defined by all people."