UNITED STATES: Space X and Tesla’s founder & CEO, Elon Musk, now wants to buy Twitter, the most popular social media network on the planet. He has offered to pay $54.20 a share for Twitter, valuing it at about $43 billion.
According to the stock exchange filing, “the offer represents a 54% premium over the closing price of the Common Stock on January 28, 2022, the trading day before the Reporting Person began investing in the Issuer, and a 38% premium over the closing price of the Common Stock on April 1, 2022, the trading day before the Reporting Person’s investment in the Issuer was publicly announced.”
Musk revealed his idea on Twitter, saying, “I made an offer.” Earlier this month, Musk revealed that he holds a 9.2 percent investment in the famous social media network.
Musk invested in Twitter because he “believes in its potential to be the global platform for free speech, which I believe is a societal need for a functioning democracy.”
“However, since making my investment, I’ve come to recognise that the company, in its current form, can neither prosper nor serve this societal necessity.”
“Twitter needs to be turned into a private firm,” he remarked, adding that the microblogging site has tremendous potential and he will help to further unlock it more.
“The proposal will be carefully reviewed by the board to decide the course of action that it believes is in the best interests of the company and all Twitter stockholders,” Twitter said.
How can Elon Musk purchase the microblogging site?
$43 billion is a huge sum, even for the world’s richest person. Elon Musk’s projected all-cash offer to buy Twitter Inc. is nearly a sixth of his total fortune of $250.6 billion.
However, the main majority of his fortune is linked to his share in Tesla Inc., the electric carmaker he co-founded, which has seen its value skyrocket in recent years, propelling him to the top of the Bloomberg Billionaires Index.
The acquisition isn’t simple, but Elon Musk has various options for finance. One alternative is for him to sell all of his Tesla stock. Another option is to use them as collateral for a leveraged buyout, maybe with outside investors.
Musk, 50, now has around $3 billion in cash and other liquid assets after spending $2.6 billion in recent months to purchase a 9.1% interest in Twitter.
Musk would have to sell around 36.5 million Tesla shares, or more than a fifth of his stake, to raise the remaining $36 billion needed to buy the remainder of Twitter. Such a departure could result in a drop in the company’s stock price, as well as raise issues about the chief executive officer’s commitment, both financial and otherwise.
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