Elon Musk has launched a $43 billion hostile takeover bid for Twitter, the social network that the eccentric billionaire behind Tesla uses as a hobby to connect with his 81 million followers, saying he thinks the platform is essential to the functioning of democracy.
“My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said. “I don’t care about the economics at all.”
The offer to take the company private in a securities filing dated Wednesday for $54.20 a share marks a major escalation in a weeks-long battle by Musk to gain influence at Twitter, following his acquiring a more than 9 percent stake and flirting with a seat on the board. In the filing, he called it a “best and final offer.” If it is not accepted, he added, “I would need to reconsider my position as a shareholder.”
Twitter confirmed in a news release Thursday that it had received an “unsolicited, nonbinding proposal” from Musk. “The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders.”
Musk took to Twitter midday Thursday, however, to say he thinks the decision should be put to the shareholders. It would be “indefensible” not to do so, he said, before posting a Twitter poll on the issue.
Absolutely. It would be utterly indefensible not to put this offer to a shareholder vote. They own the company, not the board of directors.— Elon Musk (@elonmusk) April 14, 2022
Executives addressed questions from employees at an all-hands meeting Thursday, trying to calm their concerns, according to people familiar with the matter who spoke on the condition of anonymity to describe sensitive matters. Since Musk’s interest in the company became known, employees have voiced fears that the billionaire could undo some of the company’s efforts to moderate content in favor of free speech, according to company messages obtained by The Washington Post last week.
That angst continued into Thursday, according to the people. Many were annoyed at the condescension from Musk, who didn’t seem familiar with Twitter’s inner workings or the company’s road map, and were exhausted by Musk’s shifting plans, during what was supposed to be a week of focus without interruptions. And some felt leadership‘s reassurances fell short during the town hall and were frustrated that employees seemed to be an afterthought.
Musk, who is CEO at electric car company Tesla and at his space company SpaceX, is known for somewhat brash business declarations, some of which don’t pan out. Musk famously tweeted that he had “funding secured” to take Tesla private in 2018 at $420 per share, but was fined $20 million by the Securities and Exchange Commission and lost his Tesla chairmanship when that deal failed to materialize. He also frequently announces products like the Cybertruck on a faster timetable than possible.
The price of the takeover bid ― $54.20 per share ― may be a veiled reference to that previous episode that got Musk into trouble with securities regulators.
Musk at the TED conference attacked the SEC, echoing an argument he made in a recent letter to a federal judge. “I was forced to concede to the SEC unlawfully, those bastards,” he said.
While Musk is the richest person in the world, valued at $259 billion according to the Bloomberg Billionaires Index, some analysts questioned whether he had enough liquid assets to purchase Twitter. Much of his wealth is tied up at his companies. At the TED conference Thursday, Musk assured the audience he did.
“I could technically afford it,” he said, adding, “I do think this will be somewhat painful and I’m not sure that I will actually be able to acquire it.”
Musk unloaded billions’ worth of Tesla stock beginning late last year and began purchasing shares of Twitter at the end of January, according to financial filings. Musk had said he intended to sell 10 percent of his shares in the electric car company, the most valuable automaker. Tesla’s valuation of more than $1 trillion dwarfs that of the social media network he is seeking to purchase, around $34 billion.
Musk plans to let the maximum allowable number of shareholders stay on in the private company, he said at the conference Thursday.
Some shareholders expressed their disapproval of the plan. Saudi billionaire Prince Alwaleed bin Talal tweeted Thursday that he rejected the offer, saying he didn’t think it came “close to the intrinsic value” of the company.
Musk fired back on Twitter, asking the prince to disclose how much of Twitter Saudi Arabia owned and for him to spell out the country’s views on “journalistic freedom of speech.”
U.S. intelligence has concluded that Saudi Crown Prince Mohammed bin Salman ordered the killing of Washington Post contributing columnist Jamal Khashoggi, a critic of the Saudi government, at the Saudi Consulate in Istanbul in 2018.
Interesting. Just two questions, if I may.— Elon Musk (@elonmusk) April 14, 2022
How much of Twitter does the Kingdom own, directly & indirectly?
What are the Kingdom’s views on journalistic freedom of speech?
Meanwhile, some investors and analysts who cover his two main ventures are concerned that a Musk takeover could prove a distraction from his ambitions to revolutionize the automotive and space industries. Musk has others, too: tunneling firm the Boring Co. and the company Neuralink, which seeks to implant computer chips in people’s brains.
Twitter is the smaller peer of social media competitors such as Facebook and TikTok — both of which have amassed more than a billion users — and it has faced problems of declining user growth and concerns about monetization. Still, with an estimated 217 million daily users and plans to expand that figure to 315 million by the end of 2023, some investors see potential.
Twitter is “certainly viewed as the lesser platform,” said Benjamin Black, the New York-based co-head of Internet research at Deutsche Bank. He noted, however, that the company’s shares have hit a high of $73.34 within the past year, far higher than Musk’s offer.
At the TED conference, Musk referred to Twitter as “the de facto town square” and expressed what he saw as the site’s importance to democracy and the future of civilization. Musk said he wants Twitter’s algorithm to be “open source,” echoing a poll he conducted on the site March 24. His comments suggested that he thinks Twitter is emphasizing or suppressing certain content.
Musk said any such decision should be “made apparent so anyone can see [what] actions have been taken.” Twitter affixes labels to add context to posts it deems misleading but says it does not limit content based on a person’s “views or opinions.”
In a letter to Twitter Chairman Bret Taylor, Musk said he thinks the company has the “potential to be the platform for free speech around the globe.”
Free speech is a “societal imperative for a functioning democracy,” he added. But since his investment, he has come to “realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
The SEC filing also included what appeared to be text and voice messages associated with the discussion. In a voice message that appeared to be from Musk, the Tesla CEO said, “I am not playing the back-and-forth game. … I have moved straight to the end,” adding of his offer that “It’s a high price and your shareholders will love it.”
He said he’d have to reconsider his position in Twitter if his deal were not accepted.
“This is not a threat, it’s simply not a good investment without the changes that need to be made,” he said, according to the filing.
On April 5, Twitter surprised employees and investors by announcing that Musk would join its board of directors. Days later, however, Twitter chief executive Parag Agrawal announced that Musk had backed out.
“There will be distractions ahead, but our goals and priorities remain unchanged,” Agrawal wrote. “The decisions we make and how we execute remain unchanged. The decisions we make and how we execute is in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”
Joining the board would have “handcuffed” him from fully acquiring the company, noted CFRA equity researcher Angelo Zino in an email to The Post.
Board membership also would task Musk with certain fiduciary responsibilities, such as requiring him to act in the best interests of the company.
Over the weekend, Musk unloaded some barbed tweets at the company. “Is Twitter dying?” he asked early Saturday. He went on to question Twitter’s most popular users, its San Francisco headquarters and its process for authenticating accounts. Before he was done, he made a lewd joke about changing the company’s name.
In the political sphere, Musk’s takeover bid drew mixed reactions Thursday.
Some right-wing politicians cheered Musk’s takeover attempt, playing into a broader backlash against the social media platform since it permanently banned former president Donald Trump last year.
Rep. Lauren Boebert (R-Colo.) said Musk deserves a medal for his “patriotic and necessary” fight for free speech. Nigel Farage, a British broadcaster and former politician who was a leader of the Brexit movement, called Musk’s takeover bid the best news for free speech in years.
“The panic coming from blue-check media after Elon Musk’s offer to buy Twitter is the fear of losing the ability to censor conservatives online and silence free speech they don’t like,” tweeted Rep. Darrell Issa (R-Calif.).
Others appeared concerned that Musk could gain too much control over a platform that many view as essential to free speech. Fred Wilson, a New York-based venture capitalist, said the platform is “too important” to be owned and controlled by a single person.
“The opposite should be happening,” Wilson tweeted. “Twitter should be decentralized as a protocol that powers an ecosystem of communication products and services.”
Will Oremus, Nitasha Tiku and Reed Albergotti contributed to this report.