Elon Musk to Acquire Twitter & Take it Private

  • TWTR.us
    (${instrument.percentChange}%)

Twitter-Musk Deal

Twitter (TWTR) announced on Monday that that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20, which is 38% higher that the stock's closing price on April 1. The transaction is expected to close in 2022 and is subject to shareholder and regulatory approval. Upon completion, Twitter will become a privately held company. [1]

The CEO of Tesla (TSLA) and SpaceX has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment.

Mr Musk who has more than 80 million followers on the social media platform and had criticized it for "failing to adhere to free speech principles" [2], had said at TED2022 earlier in the month that "I think it's very important for there to be an inclusive arena for free speech". [3]

On Monday's press release, he noted that "Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated", adding that he wants to make Twitter "better than ever".

This deal ends a nearly one-month saga, which started with the disclosure that Mr Musk had acquired a roughly 9% stake in the social media company [4]. After having rejected a seat at the Board of Directors, which would cap his shareholding, in mid-April he moved with a bid to acquire 100% of Twitter, for $54.20 per share. [5]

Mr Musk had commented that this would be his "best and final offer" and that if not accepted, he would need "to reconsider" his position as a shareholder. Twitter had responded by adopting a Rights Plan that would make a hostile takeover hard, commonly referred to as "poison pill". [6]

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It is unclear at this stage, if the world's richest man according to Forbes [7], will become CEO of Twitter and remains to be seen how/if it will change, but Mr Musk is disruptor and has already proposed various changes.

Twitter is expected to announce its financial results for the first quarter of the year on Thursday April 28 before market open, but will not hold a corresponding conference call.

TWTR.us rose yesterday and gains more than 30% this month, helped by the jump after the news of Mr Musk's stake in early April.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 26 Apr 2022 https://www.prnewswire.com/news-releases/elon-musk-to-acquire-twitter-301532245.html

2

Retrieved 26 Apr 2022 https://twitter.com/elonmusk/status/1507777261654605828

3

Retrieved 26 Apr 2022 https://www.youtube.com/watch

4

Retrieved 26 Apr 2022 https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/f66f56c1-eb52-43f8-a7ff-992dc80a7396.pdf

5

Retrieved 26 Apr 2022 https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/aa412090-b7e5-470b-bfea-35d48c913951.pdf

6

Retrieved 26 Apr 2022 https://www.prnewswire.com/news-releases/twitter-adopts-limited-duration-shareholder-rights-plan-enabling-all-shareholders-to-realize-full-value-of-company-301526627.html

7

Retrieved 30 Jun 2022 https://www.forbes.com/billionaires/

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