OPINION: This article may contain commentary which reflects the author's opinion.
Now we know why billionaire Elon Musk said “no” to joining the Twitter board of directors.
The world’s richest man has launched a bid to completely take control of Twitter in a hostile takeover worth $43 billion, Bloomberg News reported.
The Tesla, SpaceX and Starlink CEO will offer $54.20 per share in cash, which represents a 54% premium over the Jan. 28 closing price.
Musk, 50, announced the offer in a filing with the U.S. Securities and Exchange Commission on Thursday. The billionaire, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4. Tesla shares fell about 1.5% in pre-market trading on the news.
The executive is one of Twitter’s most-watched firebrands, often tweeting out memes and taunts to @elonmusk’s more than 80 million followers. He has been outspoken about changes he’d like to consider imposing at the social media platform, and the company offered him a seat on the board following the announcement of his stake, which made him the largest individual shareholder.
After his initial stake became public, Musk immediately began appealing to fellow users about prospective moves, from turning Twitter’s San Francisco headquarters into a homeless shelter and adding an edit button for tweets to granting automatic verification marks to premium users. One tweet suggested Twitter might be dying, given that several celebrities with high numbers of followers rarely tweet.
Musk can afford a takeover of Twitter. He’s currently worth about $260 billion according to the Bloomberg Billionaire’s Index, compared with Twitter’s market valuation of about $37 billion.
In a letter to Twitter Musk said that he believes the company “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company.”
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” he said.
Musk has hired Morgan Stanley as an advisor to help with the takeover of the social media giant.
Days ago it was speculated that decision not to take the job means he is now free to improve his position within the company, as in, buy more stock.
Musk did not sign an agreement with Twitter to join the board of directors because it had the following terms as long as he serves on the board: “Mr. Musk agrees that, for so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps or hedging transactions.”
But since Musk declined to join Twitter’s board, he is no longer bound by that stipulation, journalist Yashar Ali noted.
Given this news…@elonmusk is no longer bound to this restriction on ownership. https://t.co/gNFoPhiOer pic.twitter.com/R8Nx3p38hK
— Yashar Ali 🐘 (@yashar) April 11, 2022
Twitter CEO Parag Agrawal noted in a statement released Sunday night that it was Musk’s decision to not join the company’s board after he was offered a seat.
“Elon Musk has decided not to join our board,” Agrawal said. “The Board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward. The board offered him a seat.”
“We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance,” Agrawal continued. “Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best.
“We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input,” Agrawal added.
“There will be distractions ahead, but our goals and priorities remain unchanged,” the statement added. “The decisions we make and how we execute is in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”