Musk joked about turning the social media company's San Francisco headquarters into a homeless shelter. That isn't normally something a company's largest individual shareholder teases about but, for Musk, it's a typically impish quip.
The billionaire's bid to buy all of the social media platform could easily be seen as another attempt at mockery, considering how much he has teased about where he thinks the platform needs improvement.
The offer is serious. He told the board members that he would open it.
Musk says he is willing to put up over a third of his net worth to take the company private and implement changes that would help promote free speech around the world.
The best and final offer is $43 billion in cash, he said in the filing. Musk, the world's wealthiest person, said in an interview that he had enough assets to fund it.
The market valuation of the company is around $36 billion, and Musk is willing to pay $7 billion more than that. His bid is more than double the price of the stock on the day he began investing. The company's all-time highest closing price was just a year ago. He disclosed that he had purchased a 9% stake on April 4. Musk is also the largest individual shareholder of the micro-blogging site. Saudi Arabian investor Prince Alwaleed bin Talal, one of the company's major shareholders, said Musk's bid undervalues the company. The prince was only talking about the potential value of the site.
Musk believes that free speech is a societal imperative and that he invested in the platform as he believes it could be the platform for free speech around the globe. The company needs to be transformed into a private company.
There is a belief in corporate management circles that the best way to implement substantive change at a public company is to take it private. Executives have more freedom to make decisions without the pressure of delivering quarterly results to investors and analysts.
The board of directors said it is working with outside advisers to consider Musk's proposal. The Wall Street Journal reported that the company is considering a poison pill plan that would prevent Musk from buying more than 15% of the company. The company is going to have an all-hands meeting with employees to discuss the matter. An answer from the board could be in as little as a few days.
Musk said in a live interview on April 14 that he has a plan B, but he didn't elaborate. He said in the interview that he would try to keep as many shareholders as possible. The company has over 1,700 shareholders. If you don't make the cut, you'll get $54.20 for each share you own. By the end of the regular trading day on Thursday, investors seemed unimpressed by the stock's decline.
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