Posted on 04/25/2022 7:41:55 AM PDT by Red Badger
Twitter shares surged as news emerged that Elon Musk’s takeover bid could be accepted by Twitter’s board as early as Monday.
Reuters reported that Twitter’s board of directors is close to reaching a deal with the world’s richest man to sell the social media network for roughly $43 billion in cash.
According to anonymous sources, Twitter may announce the $54.20-per-share deal during the day after its board meets to recommend the transaction to the company’s shareholders. But the deal might potentially fall apart at the last minute, according to the sources.
Twitter’s stock jumped more than 5 percent in pre-market trading on expectations that the company could reach an agreement.
According to Reuters, Twitter was unable to secure a “go-shop” option in its agreement with Musk, which would allow the board to continue actively soliciting bids and negotiating with other potential bidders even after signing a deal with Musk.
Twitter would be allowed to accept another bidder’s offer, however, by paying Musk a break-up fee, the sources said.
Board members gathered on Sunday, according to media reports, to reexamine Musk’s offer after the billionaire announced that he secured the required financing to buy the company and take it private.
The securities filing last week showed that Musk has lined up $25.5 billion in debt financing from Morgan Stanley and other financial institutions, including Bank of America, Barclays, and BNP Paribas. Musk himself has also committed to provide $21 billion in equity financing, according to the document.
How the Twitter-Musk Saga Began A Securities and Exchange Commission (SEC) filing earlier this month revealed that Elon Musk had purchased 9.2 percent of common Twitter stock, representing about 73.5 million shares. The purchase made him the largest shareholder of the social media platform.
His holdings were about four times higher than that of founder and former CEO Jack Dorsey.
Twitter later appointed Musk to its board, with the caveat that he cannot own more than 14.9 percent of the social network, according to a separate SEC filing.
Musk would eventually reject a seat, proposing instead to buy Twitter outright and take it private. He formed three holding companies with the purpose of acquiring the tech firm.
He proposed a “best and final” offer of $54.20 per share, valuing the firm at roughly $43 billion.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” he stated in an SEC filing.
“However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
In response to the takeover bid, Twitter employed a so-called poison pill, essentially adopting a limited duration shareholder rights plan that would fight back against a hostile takeover endeavor.
In an updated filing last week, Musk confirmed he had secured $46.5 billion in funding commitments to finance the takeover. This included $25.5 billion in debt financing through Morgan Stanley Senior Funding and other firms, such as Bank of America, Barclays, and BNP Paribas. Musk attained $21 billion in additional equity financing, including $12.5 billion in loans secured by Musk’s Tesla stock.
Referring to himself as a “free speech absolutist,” Musk has put forward a series of revisions for how the social media platform operates to enhance free speech.
Speaking at a recent TED conference in Vancouver, he revealed that he wants to make Twitter a bastion of free speech with fewer restrictions, reiterating his previous stance that Twitter is a de facto public town square.
“I don’t know if I have all the answers here, but I do think that we want to be just very reluctant to delete things and just be very cautious with permanent bans,” Musk said. “Time-outs, I think, are better than permanent bans.”
Even if a tweet is considered to be harmful or controversial, Musk suggested to “let the tweet exist” but he would “not want to necessarily promote that tweet.”
“Having a black-box algorithm promote some things and not other things, I think this can be quite dangerous,” Musk added.
In addition, the billionaire CEO has suggested installing an edit button, allowing subscribers to pay with Dogecoin, and removing advertisements for monthly subscribers.
Over the last month, Twitter shares have rallied nearly 30 percent, trading above $51.
You never know - it might get worse after this! One can’t assume that old Squealin’ Elon has our best interests at heart, or cares about “freedom of speech.” It’s easy to lie when you’re hella rich. But we’ll see. (I just put a pic of me on my twatter account to sort of test the water. I’m supposedly “perma banned.”)
You want to change a business culture, you start at the top.
Nothing says "new sheriff in town" quite like executing the old one. A head on a pike is a powerful example for others.
Exactly! I closed my account when they banned Trump. Don't miss it except for James Woods. Love his tweets.
If you watch and listen to musk, he is not a deep state liberal plant. He has been warning about censorship and the danger of out of control AI for years.
Yep, the ultra rich are still somewhat resistant to cia and government control.
What happened to the poison pill that was supposed to prevent the take over by Musk.
Musk threatened them with lawsuits if they did that and he would win, because they would be abandoning their fiduciary duties to the stockholders....................
“Generally if the media starts pumping something it’s time to short”
i don’t see any “media pumping” here, merely reporting that the stock price jumped 5%, because buyers apparently believe a buyout deal at $54/share has become more likely based on recent publicly documented financing details and anonymously sourced information that a deal may be forthcoming ...
“What happened to the poison pill that was supposed to prevent the take over by Musk.”
the board can simply nuke it with a vote the same way they established it: easy come,easy go ... no doubt abolishment of the poison pill would just be one more part of the board accepting the deal ...
“I was just talking to one of the executive producers of a TV show and he told me he owns more shares of Twitter than most of the board combined or “close”. They are just figureheads and all lefties.”
Thanks for posting this reality.
Makes one wonder how many WOKE corporations are like this shell game/Twitter re board members?
Thanks for posting this reality. Makes one wonder how many levels below the soon to be former board will lose their heads/er jobs in the near future.
“It would almost be organizational malpractice if he DIDN’T fire him.
You want to change a business culture, you start at the top.
Nothing says “new sheriff in town” quite like executing the old one. A head on a pike is a powerful example for others.”
This is increasingly likely given that, as we are learning, the board isn't active on Twitter and might be insecure about being out of touch with Twitter itself and out of touch with what the shareholders want.
Keep in mind that Twitter is mostly owned by large institutions (70%+/-) and his adviser on this matter, Morgan Stanley, can easily get a sense of what such shareholders think of the Musk offer and relate that to the Twitter board.
He liked 0bama. But I am hopeful. If you go on twatter, you can tell it’s changing. They still haven’t unblocked Trumpy.
Honestly, if Trump isn't unblocked asap, then there's a problem. Whether he decides to post or not is another thing, but he should be unblocked, today.
I take pains to vote my shareholder proxies every year. I read the bios, look at the pictures, and wind up voting for the old white guys only. They usually know how to handle money.
Sounds like a fairly logical way to vote, better than many other B$’s.
Yes - the shareholders could have sued the Board.
I would be they heard from just a few of them and knew the party was over.
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