World richest person Elon Musk has offered nearly 42 billion USD in cash to completely buy the micro-blogging website, Twitter. Musk has often criticized the social media company for hindering free speech. Furthermore, he has also stressed the need to privatize it in order to see meaningful changes.
The eccentric billionaire made this move after rejecting a crucial seat on the Twitter board. The debate about whether Musk would buy Twitter started on 4th April after it was disclosed that he bought a 9.2% stake in Twitter, more than anybody else on the board.
Elon Musk Wants to Take Twitter Private
Elon Musk has offered the price of 54 USD per share on all cash transactions. Currently, Twitter is offering about 45 USD per share. According to data analysts, the total deal value was calculated based on outstanding shares amounting to 763.58 million. When Musk disclosed his take on Twitter, many analysts signalled his intentions of taking over the entire company because as a board member, he would have been limited to a maximum of 15% stake.
Musk argued that Twitter had the potential to be a platform where free speech can be rampant. He believes that it will serve greatly the “societal imperative.” Musk said that he made the current offer because “the company would neither succeed nor serve nor this societal imperative in its current state”. He heavily argued the need for Twitter to be taken private.
What if Twitter Also Refuses?
Elon Musk is currently worth around 265 billion USD and one of few persons in the world to afford buying Twitter. His offer was considerably larger than the market valuation of twitter reportedly standing at 37 billion USD.
He said that his offer was “best and final” and if Twitter failed to accept it then he would also “reconsider” his position as a shareholder. Musk explained that if the deal didn’t work then he would lose confidence in management and would not believe he could drive the “necessary change” in current position.
Twitter has not responded yet. Musk gained over 80 million followers on the platform since joining in 2009. He has made several announcements here, including cryptocurrency hints and teasing about Tesla going private that manipulated the stock market. Such actions have put him in trouble with the authorities and regulators.
Increase in Twitter’s Share Price
As soon as Elon Musk offered to buy 100% stake in Twitter, the share price went up 13 per cent. Musk has hired investment banking company Morgan Stanley as its financial advisor on the takeover.