Tesla CEO Elon Musk has offered to acquire Twitter, claiming that the social media platform, which he has criticised for failing to adhere to free speech values, needs to be turned into a private firm.
Twitter Inc said in a regulatory filing on Thursday that Musk, the company's current largest shareholder, has suggested purchasing the remaining shares of Twitter that he does not already own at $54.20 per share, a price equivalent to more than $43 billion.
Musk described that amount as his best and final offer, however, he did not give financing specifics. This is a non-binding offer that is contingent upon financing and other criteria.
“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,” Musk said in the filing. “However, since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
Twitter said it has received Musk's offer and will decide whether to accept or continue operating as a publicly-traded corporation in the best interests of shareholders.
Musk acknowledged in recent regulatory filings that he began buying shares in practically daily batches on Jan 31 and ended up with a holding of approximately 9%. Only Vanguard Group's mutual funds and exchange-traded funds (ETFs) own more Twitter shares.
In recent weeks, the billionaire has been a vociferous opponent of Twitter, mostly because he believes the platform violates free speech ideals. The social media site has enraged supporters of Donald Trump and other far-right political figures by suspending their accounts for breaking the platform's content policies against violence, bigotry, and harmful misinformation. Musk, who has defined himself as a “free speech absolutist,” also has a track record of provoking legal headaches with his own tweets.
Following Musk's announcement, Twitter immediately gave him a seat on its board of directors on the condition that he did not control more than 14.9 per cent of the company's outstanding stock, according to a filing. However, five days later, the corporation announced that he had declined.
He did not explain why, but the decision coincided with a barrage of now-deleted tweets from Musk proposing significant changes to the company, including the elimination of advertisements — the company's primary source of revenue — and the conversion of the company's San Francisco headquarters into a homeless shelter. Musk left a few indications about his views on Twitter, such as “liking” a tweet summarising the events as Musk going from “biggest shareholder supporting free speech” to being “told to play nice and refrain from speaking freely.”
Musk is one of the most popular individuals on Twitter, rivalling music artists Ariana Grande and Lady Gaga, with 81 million followers. However, his incessant tweeting has occasionally landed him in hot water with the US Securities and Exchange Commission (SEC) and other regulatory agencies.
Musk and Tesla agreed in 2018 to pay $40 million in civil penalties and to have Musk's tweets reviewed by a company lawyer after Musk tweeted about having enough money to take Tesla private at $420 per share. That did not occur, but the tweet resulted in a spike in Tesla's stock price. Musk's most recent run-in with the SEC may stem from his failure to tell regulators of his growing ownership of Twitter.
Twitter's stock rose 11% before the market started. The stock remains well below its 52-week high of over $73. Tesla's stock fell roughly 0.9 per cent. Musk is the CEO of the electric vehicle company.