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One piece of big news over the last few weeks has been Elon Musk’s offer to purchase the social media platform Twitter. More news has trickled out day by day since the initial offer, so read on below for everything we know so far: Will Elon Musk actually buy Twitter?
Musk began showing an interest in helping direct Twitter’s future last month through a series of polls and tweets. On April 4, he announced that he had purchased a nine percent stake in the company, and shortly afterward, he announced that he had accepted a position on Twitter’s board of directors. A few days later, Musk went silent on Twitter, and CEO Parag Agrawal announced that Musk had decided not to go forward with a position on the board.
Last Thursday, April 14, Elon Musk announced on Twitter that he had made an offer to buy all the shares of the company for $54.20 apiece, or roughly $43 billion. This would make the entire company private and solely owned by Musk, with shareholders being bought out for roughly $9 per share more than the current market value of their shares.
The board’s decision
On Friday, April 15, Twitter announced that it had adopted a shareholder rights plan, also known as a “poison pill,” to keep Musk from attempting a hostile takeover. The poison pill essentially means that if any person or group acquires 15 percent or more of Twitter’s stock, other shareholders will be able to buy more shares at a reduced price.
This plan would flood new shares into the market if Musk attempts a large buyout, preventing him from obtaining a majority stake without spending far more money.
Although the board rejected Musk’s offer to take the company private, he has stated that he has a “Plan B.” He hasn’t yet announced his new plans, but there are several theoretical approaches that he could take.
By bringing in other investors as shareholders of Twitter, Musk could effectively control the company without personally reaching a 15 percent stake in the company and triggering the poison pill. Conversely, Musk could resort to building a completely new social media platform.
Why does Musk want to buy Twitter?
On March 25th, Musk put out a poll on Twitter saying “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” Over two million people responded to the poll, with 70% of them saying no.
Musk followed up the poll with another tweet prompting his followers for input, saying “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?”
Musk received a variety of responses to the tweet, with many encouraging him to buy Twitter or develop his own social media platform. Musk is focused on pushing for free speech on social media platforms, and as many recent new social media platforms have failed to take off, he decided to attempt a buyout of Twitter.