Elon Musk launches hostile bid for Twitter claiming free-speech concerns
Tesla CEO trying to take over the company for more than $40B US
- Funding secured, Musk quips
- Twitter shares below offer price, other shareholders rebuffing offer
The on-again, off-again relationship between Elon Musk and Twitter took a new twist on Thursday as the world's richest person made a hostile bid to buy up the whole company for more than $43 billion US.
In a regulatory filing, Twitter revealed that Musk has offered to buy up all outstanding shares in the company for $54.20 US a share. With 800 million shares available, that values the company at just over $43 billion US.
Speaking at the TED conference in Vancouver on Thursday, Musk said his motivations are not financial but rather come from a desire to preserve the "public square" that Twitter has become.
"This is not a way to make money.... I don't care about the economics at all," he said.
"This is just my strong, intuitive sense ... that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization," Musk, the CEO of Tesla, said.
I made an offer <a href="https://t.co/VvreuPMeLu">https://t.co/VvreuPMeLu</a>—@elonmusk
"The truth matters to me, a lot," he said of his motives. "Sort of pathologically, it matters to me."
The move is the latest development in the month-long saga between Musk and Twitter, after it emerged in early April that he had quietly bought up more than 73 million shares in the company — more than any other single person or entity owns.
Musk called his hostile takeover offer his "best and final price" for the company, but he acknowledged that the deal is far from certain.
Investors seem to think the deal is very much in doubt, as the shares are trading at $45 apiece on Thursday, well below Musk's offer price.
What happens next
"Investors are not expecting another offer or a bidding war," said Colin Cieszynski, a strategist at SIA Wealth Management in Toronto.
Daniel Ives, an analyst at Wedbush Securities in New York, told CBC News in an email that he thinks it could take between 30 and 45 days for the process to sort itself out, but ultimately he thinks Musk will be successful.
"This soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company," Ives said.
The multi-billionaire has been a vocal critic of Twitter in recent weeks, mostly over his belief that it falls short on free-speech principles.
The social media platform has angered followers of former U.S. president Donald Trump and other far-right political figures who have had their accounts suspended for violating its content standards on violence, hate or harmful misinformation.
Musk also has a history of his own tweets causing legal problems.
He confirmed that if successful in his bid, he would want to implement the long-discussed edit button that would allow users to alter a tweet after it was posted. The edit functionality would be available only for a "short period of time," Musk said, and editing would "zero out all retweets and favourites."
He also vowed to eliminate the "spam and scam bots" on the platform.
'I could technically afford it'
Musk, who is worth in excess of $259 billion, has the financial means to buy Twitter, but he says he would rather take the company private with as many private investors as legally possible, as long as they share the common goal of keeping the platform open.
"It's not from the standpoint of let me figure out how to monopolize or maximize my ownership," he said.
When asked at the conference in Vancouver if funding had been secured for the deal, he quipped: "I could technically afford it."
That "funding secured" line was a reference to something that landed him in hot water with regulators in 2018, when he said on Twitter that he planned to take his electric car company Tesla private for $420 a share.
That deal never materialized, and he was forced to settle with the U.S. Securities and Exchange Commission for $40 million for misleading investors. In his comments on Thursday, Musk reignited that old fight.
"With Tesla back in the day, funding was actually secured — I want to be clear about that," Musk said, adding he settled with the SEC at the time because of pressure put on his lenders by regulators. He described it as "like having a gun to your child's head. So I was forced to concede," and he used an expletive to describe the SEC.
Twitter's board is meeting to discuss bid
Musk has described himself as a "free-speech absolutist" and has said he doesn't think Twitter is living up to free-speech principles — an opinion shared by followers of Trump and a number of other right-wing political figures who've had their accounts suspended for violating Twitter content rules.
"Be very cautious with with permanent bans," he said. "Timeouts I think are better."
Twitter's board of directors has acknowledged receipt of Musk's offer, and it's meeting Thursday to discuss whether to accept it or recommend that shareholders reject it. There's an all-staff meeting with Twitter employees at 5 p.m. ET on Thursday, U.S. financial channel CNBC reported.
At least one prominent Twitter investor is making it clear he has no interest in selling for what Musk is offering to pay.
Saudi Prince Al Waleed bin Talal Al Saud, another major Twitter shareholder, has come out against the deal, noting that the price offered doesn't "come close to the intrinsic value of Twitter, given its growth prospects."
I don't believe that the proposed offer by <a href="https://twitter.com/elonmusk?ref_src=twsrc%5Etfw">@elonmusk</a> ($54.20) comes close to the intrinsic value of <a href="https://twitter.com/Twitter?ref_src=twsrc%5Etfw">@Twitter</a> given its growth prospects. <br><br>Being one of the largest & long-term shareholders of Twitter, <a href="https://twitter.com/Kingdom_KHC?ref_src=twsrc%5Etfw">@Kingdom_KHC</a> & I reject this offer.<a href="https://t.co/Jty05oJUTk">https://t.co/Jty05oJUTk</a> <a href="https://t.co/XpNHUAL6UX">pic.twitter.com/XpNHUAL6UX</a>—@Alwaleed_Talal
Through his personal holdings and influence on Saudi Arabia's national investment fund, the prince says he will soon control more than five per cent of Twitter shares and has no interest in selling them to Musk.
Geneviève Roch-Decter, CEO of Toronto-based Grit Capital, says that Musk's interest is not surprising.
"Billionaires love to own media platforms," she told CBC News in an interview, "and Elon Musk loves his megaphone."
Regardless of the price paid, Roch-Decter says it would be worth it for Musk to have that much presence in the media without having to worry about profitability.
"This is a man who spends zero dollars on marketing.... The marketing he does is just tweeting crazy things."
The company's share price has languished for years, which might make the prospect of a buyout appealing for many shareholders.
"They're kind of a dinosaur," she said. "I'm not sure that just having an edit button here and a tip jar here is going to move the dial on the revenue."
Other analysts think the story is far from over. "Musk's 'best and final' $43-billion, non-binding offer has numerous conditions, including completion of financing, which we believe give it a low probability of success," Bloomberg Intelligence credit analyst Robert Schiffman said. "[But] well-capitalized, white-knight suitors could emerge."
With files from The Associated Press