Following his acquisition of over 10% of Twitter’s stock, Elon Musk announced his intention to buy the social network entirely. Three days earlier, the world’s richest man said that he would not be joining the board of directors of Twitter.
Getting on the board would have allowed him to buy more than 14.9%. Musk took advantage of his freedom by executing a hostile takeover, as the bond was abolished.
Elon Musk wants total control
For $54.20 per share, the richest man in the world offered $43 billion. On April 13, the SEC (Securities and Exchange Commission) was informed of the proposed purchase.
The SEC, the US Securities and Exchange Commission, was notified about the potential acquisition of Twitter through a document required by local regulations for purchases of this size.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
Twitter has a market capitalization of around $37 billion. The $43 billion dollars (54.20 euros per share) are so inflated. Musk wrote to Bret Taylor, Chairman of the Board, saying:
I invested in Twitter because I believe in its potential to be the platform for free speech around the world and I believe that free speech is a social imperative for a functioning democracy. However, since I made my investment, I now realize that the company will neither thrive nor serve this social imperative in its current form. Twitter needs to be turned into a private company. As a result, I am offering to buy 100% of Twitter for $ 54.20 a share in cash, a 54% premium over the day before I started 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 should reconsider my position as a shareholder.
Why does Elon Musk want to buy Twitter?
What’s written inside the letter is that, if the proposal is approved by shareholders, Musk will take Twitter private. Elon Musk will become the sole owner of the company, which will no longer be listed on the New York Stock Exchange.
A month before he said that he was interested in buying all of Twitter’s shares, a tweet from Musk on his Twitter account said that the social network doesn’t follow free speech rules, which hurts democracy.
Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.
What should be done? https://t.co/aPS9ycji37
— Elon Musk (@elonmusk) March 26, 2022
If his proposal is not accepted, the richest person in the world, who has a fortune of $260 billion, says in the same document that he will think about whether to stay as a shareholder. This means that the stocks that he bought earlier this month could be put up for sale again.