Twitter begins talks with Elon Musk as shareholder pressure mounts
Tesla and SpaceX CEO Elon Musk has secured the funding to buy Twitter. Anonymous sources familiar with the situation claim that the social media company has already started discussions with the voice CEO over the weekend.
Reuters makes it clear that these initial talks, which would have started on Sunday, April 24, 2022, do not mean that Twitter accepts Musk’s $43 billion offer to buy Twitter. Musk said earlier he would execute the deal at $54.20 per share.
Pressure from shareholders, politicians and the general public — as well as the fact that Twitter may not have a better offer — could help push the negotiations forward. That may be especially true now that Musk has proven he has the funding to make it happen.
Reuters also notes that Musk has already held meetings with Twitter shareholders to drum up support for the potential acquisition. The publication claims that after talking to Musk, many Twitter shareholders are pushing for the social media company to accept Musk’s offer while it lasts. However, Musk made it clear that his offer was the “best and final”, and it makes sense that the folks at Twitter would want to negotiate.
The report goes on to say that Twitter is working to get more details from Musk regarding the funding, as well as any ongoing SEC investigations into the CEO. The company also hopes to push for a better deal. All of this information was flagged as coming from undisclosed sources who also said they were unsure whether Twitter would consider a sale to welcome other investors and pressure Musk’s offer.
Twitter would like to ensure that regulators support Musk’s ownership of the company. If it comes to the conclusion that there are too many potential risks involved, Twitter could “seek significant severance pay,” according to the unnamed sources cited by Reuters.
Regardless of how this all plays out, Twitter needs to be careful along the way because it now knows Musk is garnering shareholder support. It would be a bad idea if the company refused the deal even though Musk had the support. However, there are also shareholders who think Musk’s $54.20 offer is too low considering Twitter’s future value.
Reuters shared the text of a tweet sent by Saudi Prince Alwaleed bin Talal, who invests in Twitter:
“I don’t believe Elon Musk’s offer ($54.20 per share) comes close to Twitter’s intrinsic value given its growth prospects.”
Meanwhile, Kerrisdale Capital Management hedge fund manager Sahm Adrangi said:
“I would say, take the $54.20 a share and get it over with.”
What do you think? Should Twitter accept and be done? Or should he prolong negotiations in hopes of pushing Musk away and/or finding a better deal? Start a conversation in our comments section below.