Table of Contents
Introduction
Over the past weeks, there has been quite a buzz around the love-hate relationship between Twitter and Elon Musk. It seems like Twitter is on the verge of reaching an agreement with Elon Musk.
The social media company is very close to accepting the offer price of $54.20/share, which takes the value of the deal to $43 billion. Many believe that it is just a matter of time before the takeover is complete and that an announcement will be made at any time.
Twitter board shows the green flag after initial opposition?
When rumors regarding the takeover started floating around on the internet, it generated quite a reaction from around the world.
While the world is actively tracking the development of this story, the company’s board seems to have taken a U-turn after opposing Musk. After the initial opposition, it seems like things have changed drastically after Musk filed details of the funding for his bid last week.
Following his bid, there were multiple meetings between the world’s richest man and Twitter shareholders.
Although the board of directors met Musk on Sunday, it does not clearly indicate that the $54.20 bid for each share will be accepted. However, it signals that Twitter is exploring whether the sale to Musk is an attractive option.
Musk may put in a hostile bid if his takeover attempt fails
Musk has not ruled out the possibility of a hostile bid last week for shares in the company. In layman’s terms, it means that Musk would go around Twitter’s board to complete the takeover.
As things stand, a possibility of a hostile takeover cannot be ruled out if official talks hit a dead end. However, any attempts at a hostile takeover could face the poison pill defense. It means that the shareholding of any person who buys more than 15% of Twitter without the green signal from the board will be diluted. There are concerns on Twitter about unleashing the poison pill defense if Musk’s bid is backed by big shareholders.
As we speak, while Musk owns 9.2% of Twitter, the asset management firm Vanguard is the largest shareholder with more than 10% shares.
See Also: 6 Elon Musk companies that are disrupting the world
Twitter knocks on the door of active investigations by regulators
Experts believe that the U.S. antitrust law is not likely to pose a problem for Musk, who is the Chief Executive of Space X. Musk is also the owner of the tunneling company the Boring Company. However, both businesses are not direct competitors of Twitter in any market around the world.
However, it has been reported that Twitter is on the lookout for any active investigations by regulators on Musk.
Although Elon Musk has been quite active on Twitter for quite a while now, his plans to bring Twitter under his ownership have a lot to do with shaping Twitter in line with his vision of making it a “free speech platform.”
Leave your comments below and tell us if you want this deal to go through.
Conclusion
The Twitter-Elon Musk saga continues to develop rapidly, with Musk’s offer of $43 billion now showing potential for serious consideration. After initial opposition, Twitter’s board appears to be warming up to the idea of Musk’s acquisition, though there is still uncertainty surrounding the final decision. Musk’s plans to turn Twitter into a “free speech platform” could be a major driving force behind this deal. However, a hostile takeover remains a possibility, and the situation could escalate further with regulatory investigations. Time will tell if this deal will push through and how it will shape Twitter’s future.
FAQs
- Why did Twitter initially oppose Elon Musk’s bid?
- Twitter’s board initially opposed the bid due to concerns about Musk’s intentions and the impact of his ownership on the platform’s direction.
- What is a hostile takeover?
- A hostile takeover is when a company’s bidder attempts to buy the company without the approval of its board of directors, often by appealing directly to shareholders.
- What is the poison pill defense?
- The poison pill defense allows a company to issue new shares to dilute the stock of any entity trying to buy more than a certain percentage of the company (usually 15%) without approval, thereby making the takeover more difficult.
- What does Elon Musk want to do with Twitter?
- Musk aims to transform Twitter into a “free speech platform” and is likely to make significant changes to the platform if the acquisition goes through.
- Are there any regulatory concerns for Musk’s acquisition of Twitter?
- While experts believe U.S. antitrust laws might not pose a significant issue, there are concerns about investigations into Musk’s other business ventures and how they may impact the deal.
For more updates on the ongoing developments, stay tuned to iTMunch!
