Elon Musk Tries To Buy Twitter: What’s Actually Happening
Reading between the headlines to get the real story on Elon’s Twitter bid
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On Thursday, Elon Musk announced an offer to buy Twitter. He proposed buying the company’s shares at $54.20 each, a $9 per-share premium, presenting its board with a tough decision.
Musk is a brilliant businessman. He founded one company that sends rockets to space and another that popularized electric vehicles. But selling Twitter to him isn’t as simple as turning it over to a master builder. Let’s take a deeper look:
1. This may be a farce
Musk admitted in his SEC filing Thursday morning that he hasn’t yet completed the financing to buy Twitter. He reaffirmed that on the TED stage later in the day. Musk in the past said he had funding to take Tesla private and ultimately didn’t follow through. He may be toying with Twitter, angry that his first attempt to influence it via a board seat didn’t work out.
2. The most likely outcome is Musk sells his shares
If the Twitter board calls Musk’s bluff or spurns his offer, he can walk away, sell his shares, and antagonize from the outside while saying he tried his best. Musk is also likely interested in punishing the board and the company for the false flirtation that took place last week. His most likely path is to sell.
3. Twitter is less valuable if Elon runs it as a private company
Part of the appeal of Musk’s involvement is it turns Twitter into a meme stock, a place where retail investors pour their cash. If private, that aspect goes away, which will make it tough for Musk to get outside investors to go along for the ride.