After staying away from the spotlight for about a week, Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk is back with a bang.
What Happened: Musk has made a non-binding proposal to buy all outstanding shares of Twitter, Inc. (NYSE:TWTR) for $54.20 per share, an amended 13D report filed with the SEC showed. This would represent a 38% premium over the stock price that was prevailing the day before Musk disclosed his passive stake in Twitter.
In a letter addressed to Brent Taylor, the chairman of Twitter's board, Musk said he believes in the platform's potential to be one for free speech around the globe and that free speech is essential for a functioning democracy.
Musk began accumulating shares in Twitter in late January.
"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," Musk told the board.
I made an offer https://t.co/VvreuPMeLu— Elon Musk (@elonmusk) April 14, 2022
The Tesla CEO said the offer he made is his best and final. "I have decided I want to acquire the company and take it private," he said.
Musk gave an ultimatum to the board — if his offer is not accepted, he would reconsider his position as a shareholder. "This is not a threat, it's simply not a good investment without the changes that need to be made," he said. "And those changes won't happen without taking the company private."
"Twitter has extraordinary potential. I will unlock it" — Elon Musk
Why It's Important: Musk In late November, co-founder Jack Dorsey gave up his role as the chief executive officer and India-born Parag Agrawal was named to the position.
Musk was particularly active on Twitter around the time of his disclosure of a passive stake in Twitter, Inc. (NYSE:TWTR). Ahead of the disclosure, he was seen running Twitter polls on whether free speech is essential for a functioning democracy and whether Twitter adheres to the principles of free speech.
Later he was seen seeking opinions on whether Twitter needs an edit button. He was also seen wheedling out tips for the Twitter Blue subscription plan and said the most followed accounts were not tweeting often enough.
Since Musk disclosed his stake in Twitter on April 4, the stock rallied as much as 39% before giving back some of the gains. The stock is still up 17% from the pre-disclosure level.
Amid all this, CEO Agrawal made an announcement that Musk was joining Twitter's board, with the Tesla CEO confirming the same on Twitter in a now-deleted tweet.
Agrawal came back to communicate a day later that Musk had decided against joining the board but no reasoning was given behind this change of stance.
Following this, prominent Tesla bull and Wedbush analyst Daniel Ives said in a note the odds of Musk taking a more hostile stance toward Twitter and further building his active stake in the company were now higher.
Price Action: In premarket trading, Twitter shares were surging up 11.58% to $51.15, according to data from Benzinga Pro.
Photo: Courtesy of Heisenberg Media via Wikimedia