Musk will end up owning Twitter, says analyst as Tesla CEO offers $41 billion in cash

Record ID: 1668598

  • Title: Musk will end up owning Twitter, says analyst as Tesla CEO offers $41 billion in cash
  • Date: 14th April 2022
  • Summary: WESTFIELD, NEW JERSEY, UNITED STATES (APRIL 14, 2022) (REUTERS) (SOUNDBITE) (English) WEDBUSH SECURITIES, MANAGING DIRECTOR, DANIEL IVES, SAYING: "Look, I think Musk and Twitter, it's going to be a hot-button issue. You know, it's a political firestorm, freedom of speech and other areas. For Musk, I mean, social media is not been his, you know, forte, but obviously he's a huge user of Twitter. He's going to have experts that are going to come in and try to change the platform. And it's hard to argue with the success of PayPal, Tesla and SpaceX. And that's what investors are betting on. But I think for the Twitter board and for the executives there, this becomes their worst nightmare."
  • Embargoed: 28th April 2022 16:01
  • Keywords: 38% premium Elon Musk Tesla CEO Twitter price of $54.20 per share social media taken private
  • Location: VARIOUS
  • City: VARIOUS
  • Country: USA
  • Topics: Company News Markets,Economic Events,United States
  • Reuters ID: LVA007178114042022RP1
  • Aspect Ratio: 16:9
  • Story Text: Elon Musk took aim at Twitter with a $41 billion cash offer on Thursday (April 14), prompting a spike in shares of the social media giant, which the Tesla CEO said needs to be taken private to grow and become a platform for free speech.
    Musk's offer price of $54.20 per share represents a 38% premium to Twitter's April 1 close, the last trading day before the Tesla chief executive's stake of more than 9% in the social media platform was made public.
    The billionaire rejected an offer to join Twitter's board this week after disclosing his stake, a move which analysts said signaled his intention to take over the company as a board seat would have limited his stake to just under 15%.
    Musk, who calls himself a free-speech absolutist, has been critical of the social media platform and its policies, and recently ran a poll on Twitter asking users if they believed it adheres to the principle of free speech.
    Twitter will review the offer with advice from Goldman Sachs and Wilson Sonsini Goodrich & Rosati, a source told Reuters.
    Shares in Twitter jumped 12% in premarket trading, while those of Tesla fell about 1%.
    Based on Twitter's Wednesday closing price of $45.85, its price in pre-market trading in New York implied a 35% chance of the company accepting Musk's offer.
    The total deal value of $41 billion was calculated based on 763.58 million shares outstanding, according to Refinitiv data.
    Musk said U.S. investment bank Morgan Stanley was acting as financial adviser for his offer. He did not say how he would finance the transaction if it goes ahead.
    Musk has amassed more than 80 million followers since joining Twitter in 2009 and has used it to make several announcements, including teasing a go-private deal for Tesla that landed him in hot water with regulators.
    He has also been sued by former Twitter shareholders who claim they missed out on the recent run-up in its stock price because he waited too long to disclose his stake.
    Twitter's lower-than-expected user additions in recent months have raised doubts about its growth prospects, even as it pursues big projects such as audio chat rooms and newsletters.
    (Production: Aleksandra Michalska)
  • Copyright Holder: REUTERS
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