Elon Musk wants to offer $43 billion in sake to buy Twitter, commenting that "social Media needs to convert into a private company." The billionaire Musk, who is the founder of Tesla cars, disclosed this month that he owns a 9.2% shares in Twitter, proposed in a regulatory filing on Thursday to acquire all the remaining shares for $54.20 per unit.
Musk Stated in the filling, " I have invested in Twitter as I believe in its potential that can become a great platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy."
"However, since making my investment in Twitter, I now realized that the company will neither grow nor serve this societal imperative in its recent state."
Twitter replied in a statement, "we have received Musk's offer to buy remaining shares, and the board will carefully look at this proposal."
Twitter shares suddenly rose from 3.6% to $47.49 in early trading. Social media platform's shares, which were worth $37 billion before Musk's offer, faced a great downward in digits by roughly a third over the previous year.
Elon Musk called Twitter's "amazing potential" and stated that his spontaneous bid is his "best and last offer." He also stated that if his bid was rejected, he would "reconsider" his investment in the firm.
Musk later told journalist Chris Anderson at a TED event in Vancouver, Canada, on Thursday that "it's extremely vital for there to be an inclusive venue for free expression," adding that Twitter "has become the de facto town square."
He also stated that the firm is crucial for democracy in the United States and throughout the world while admitting that he is unsure if he would be able to secure a deal for Twitter. "This is not a method to generate money," he explained.
Musk, who also established SpaceX, said on April 4 that he had purchased a $2.9 billion stake in Twitter, making him the company's largest stakeholder. The firm stated at the time that Musk would join its board of directors, but Twitter CEO Parag Agrawal stated on Sunday that Musk had changed his mind and would not serve on the board.
Musk has 80.5 million Twitter followers, which puts him ahead of superstars like Kim Kardashian and Selena Gomez.
However, his frequent tweeting has also caused regulatory concerns, such as his long-running conflict with the Securities and Exchange Commission when he claimed in 2019 that he had enough money to take Tesla private for $420 per share. This did not occur, but it led the stock to rise and drew the attention of authorities.
Musk, as Twitter's largest shareholder, was anticipated to press the firm on free speech concerns, on which he has previously spoken out. Musk's purchase offer letter emphasized this point, emphasizing his commitment to "free expression."
Musk also implied in his offer that he may want to modify the way Twitter runs. For example, he has advocated for more access to "verified" accounts, or Twitter accounts marked with a blue checkmark, which are reserved for public figures, journalists, and other persons in the news.
Twitter's revenue has been expanding, with sales expected to increase 36 percent to more than $5 billion by 2021. However, the firm lost money over the previous two years, and some investors fear it is lagging behind social media competitors. According to one expert, if Twitter rejects the offer, it will need to provide a compelling justification.
Nonetheless, some Twitter stockholders are already skeptical about Musk's offer. Saudi Arabia's Prince Alwaleed bin Talal, who owns around 5% of Twitter, said in a tweet that the deal grossly undervalues the firm and that he will reject it.
According to analysts at BofA Global Research, Twitter's board is unlikely to accept Musk's initial approach, with management valuing the firm at significantly more than $43 billion based on internal growth projections.
"We believe the board believes Twitter is worth more than $54 a share, but it must also carefully assess Twitter's ability to meet its 2023 financial targets of 315 [million] users and $7.5 [billion] in revenue. If the board rejects Mr. Musk's bid, meeting these benchmarks will almost certainly be scrutinized more closely "According to a report by experts.