Twitter’s stock rose over 5% on Monday after the social media firm publicly accepted Tesla entrepreneur Elon Musk’s $44 billion acquisition bid. Investors hailed reports that the company’s board of directors has been talking with Musk, with an agreement expected to be disclosed later in the afternoon. The board of directors of Twitter has voted to sell the firm, accepting Musk’s initial buyout offer of $54.20 per share, valuing the company at about $44 billion. Twitter’s board of directors unanimously authorized the acquisition, which is set to happen later in 2022 subject shareholder approval.
Until recently, it was expected that Twitter would reject Musk’s offer to purchase the firm and take it personal, having implemented a “toxic plan” to stave off any hostile acquisition. In recent days, the board appeared to be more amenable to Musk’s acquisition bid, particularly after the Tesla entrepreneur revealed last week in an SEC filing that he had acquired $46.5 billion in financing.
Twitter would become a private equity firm once the purchase is done. In a statement, Musk added, “Free speech is the core of a functional democracy, but Twitter is the online town square wherein subjects crucial to humanity’s future are debated.” “I would like to build Twitter better than it has ever been by adding new features, opening up the algorithms to increase trust, combating spam bots, and verifying all humans.”
“The Twitter Board performed a rigorous and extensive process to analyse Elon’s bid with a conscious focus on value, clarity, and finance,” stated Bret Taylor, Twitter’s independent panel chair. The deal will provide a significant cash premium to Twitter investors, and we think it is the best route ahead for the company’s stockholders.”
Musk announced in early March that he had paid $2.89 billion for a 9.2 percentage stake in Twitter. He also blasted Twitter in a twitter post, claiming that “failing to conform to free speech norms fundamentally harms democracy.” In a company statement on April 13, Musk indicated that he intended to take Twitter privately and that he “invested in Twitter because I think in its ability to be the platform for free speech all around the world, and I believe free speech is a social essential for a functioning democracy.”
On Monday, Twitter shares gained 5.5 percentage to $51.63 before trading was suspended in the afternoon due to pending news. The $54.20 per share offer is a 38 percent premium to Twitter’s closing price on April 1, 2022, the final trading week before Mr. Musk revealed his investment in the company. Meanwhile, the price of DOGE coin has increased by more than 20% since news of a possible deal broke on Monday morning. Musk’s passion for DOGE has some investors speculating that if he were to control Twitter, DOGE might play a bigger part in payments. Moreover, according to a press statement, Musk, the world’s richest person, has obtained $25.5 billion in totally committed credit and margin loan financing for the purchase, as well as about $21.0 billion in equity commitment.