- Twitter has decided to reconsider Elon Musk’s proposal of buying it out
- The development came after various rounds of cat and mouse between Elon Musk and Twitter
- Whatever the result is, it is going to massively impact politics all around the world.
Elon Musk’s days of flip-flopping on his possible deal with Twitter seem to be over. The maverick billionaire appears resolved to buy the social media company Twitter at any cost.
Twitter reconsidering Elon’s proposal
According to reports available in public domain, after various rounds of playing corporate cat and mouse, Twitter is reconsidering Elon Musk’s proposal to buy the company. Recently, Elon Musk had offered to buy Twitter for $54 per share. Apparently, it would cost Elon Musk $43 billion to buy 100 percent shares. Musk later announced that he had secured $46.5 billion in financing for his Twitter bid.
Initially, Twitter stood in defiance of Musk’s proposal to buy it out. The company even offered Musk to join its Board. However, Musk decided to not accept the invitation. If a person joins Twitter Board, then he won’t be able to become the sole owner of the company as any member on the Board of company can buy only 15 percent of the shares.
Elon Musk had launched a hostile takeover of Twitter
Later, Elon Musk launched a hostile takeover of Twitter, which prompted Twitter to adopt a poison pill. A poison pill is a strategy in which companies offer their shares at discounted rates to existing shareholders. This is done to ensure that a big investor doesn’t end up grabbing a major chunk of the company’s shares. This was done to ensure that Musk does not end up buying more than 15 percent of the company’s shares.
Read more: King of boardroom coups Elon Musk outfoxed by Twitter
In his response, Musk threatened to launch a tender offer. Through a tender offer, Musk would offer attractive deals to shareholders which would help him stranglehold Twitter’s management. Looking at the 83.3 million loyal fan base of Elon Musk, it was natural for Twitter to feel threatened.
Read more: It’s on! Joe Biden Vs Elon Musk
Problems being faced by Twitter
Meanwhile, some big shareholders of the company also came out in support of Musk’s offer. Hedge fund managers, who generally invest for a short period of time, want Twitter to accept the offer. According to a Moneycontrol report, their main concern is plunging values of technology stocks in the wake of economic slowdown and rising inflation numbers in the USA. Twitter’s concerns about Musk’s impact on Company’s future have been exacerbated by an increase in retail shareholders in the company. After Musk decided to invest in a social media company, Twitter’s retail investor base has increased by 10 percent from the base of 20 percent.
Reportedly, Twitter is pondering over the implications if the deal is finalized. It has to convince the remaining shareholders who stand against the deal. One of these shareholders is Saudi Arabia’s Prince Alwaleed bin Talal. The company is also checking if the countries in which it is operating will have any issues with Mr. Musk being appointed as chairman. Moreover, recent Biden administration’s investigations on Elon Musk have also put Twitter in doubt.
With every passing day, a new update regarding the possible deal appears. However, Twitter’s decision to reconsider Elon’s proposal seems to be a promising start for Musk. Whatever the result is, it is going to have a massive impact on politics all around the world.