Foiling Twitter’s hopes of him joining their board did not seem enough for Elon Musk, CEO of Tesla and SpaceX, as he recently announced an unsolicited bid to buy the US-based social networking service for around USD 43.4 billion (approximately PHP 2.2 trillion). This meant the acquisition of Twitter at USD 54.20 per share in cash. Along with this is the pledge to “uphold free speech” and to “keep as many shareholders in privatized Twitter as allowed by law.” He has reportedly hired financial services firm Morgan Stanley as his advisor for the deal.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in the letter addressed to Twitter board chairman Bret Taylor, “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
Musk also declared that he seeks to have Twitter’s algorithm should be open source to minimize policing interventions and to transform Twitter’s moderation policies.
“Twitter has become kind of the de-facto town square,” he added, “It’s just really important that people have both the reality and the perception that they’re able to speak freely within the bounds of the law.”
In addition, Musk is mulling changes to the recently confirmed work on Twitter’s edit feature.
Earlier, on April 4, Musk disclosed that he had bought 9.2 percent of Twitter shares, making him its single largest shareholder, and causing a surge in Twitter’s stock to USD 49.97. Musk followed up his offer by expressing that Twitter shareholders should have the decision on this, not the board. Twitter closed at USD 45.08 per share after Musk unveiled his offer. In the midst of this complex, developing story with the social networking service, it is expected that the Twitter board might be bound to fight Musk’s attempts to take over the company.
A civil complaint was filed this week by law firm Block & Leviton on behalf of Twitter shareholders. They argued that Musk took too long to disclose his moves in buying up Twitter shares. As of March 24, Musk had already accumulated 5 percent of equity stake in Twitter, but had not disclosed this despite the requirement of the Securities and Exchange Commission (SEC) for investors to publicly reveal this via regulatory filing within 10 days of acquisition. The SEC, however, has not made official statements on the issue as of writing.
Meanwhile, although the Twitter board is yet to formally respond to Musk’s announcement, tech publication The Information reports that the board saw this as an “unwelcome” development. The plan thus far appears to be meeting up with Twitter employees to discuss the matter. According to at least two sources of the Wall Street Journal, the all-hands meeting only revealed the board is in the process of considering Musk’s unsolicited offer. To add, a source of The Verge cited that the board’s decision will have “the best interest of our shareholders” in mind.
— Elon Musk (@elonmusk) April 14, 2022
Growth for the long-term remains a contentious issue for Twitter, as Musk himself posted a forecast from Goldman Sachs shortly after declaring his offer. Twitter’s financial reports in the last quarter of 2021 showed mixed results, with the revenue of USD 1.56 billion (approximately PHP 81.7 billion) being lower than what analysts projected. Nonetheless, Twitter remains optimistic of its medium-term sustainability. It is currently aiming for 315 million daily active users and USD 7.5 billion in annual revenue by 2023.
Source: Yugatech
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