Twitter Shares Rise 3% on News Elon Musk May Be Interested In Acquiring The CompanyTesla Motors CEO Elon Musk is in the process of taking an active stake in Twitter. The CEO's interest could lead to a hostile takeover‚ if he decides to make a bid. A Wedbush Securities analyst predicts that Musk will become active‚ as Musk has been in trouble recently for tweeting controversial remarks. Twitter shares rose 3% on news that Musk may be interested in acquiring the company.
Elon Musk's bid to take over TwitterAfter Elon Musk's announcement of a $900 million bid to acquire Twitter‚ shares have jumped 3% in just one day. Musk made the announcement at the TED 2022 conference in Vancouver. While the motivation for the move remains a mystery‚ it has left Wall Street analysts scrambling. Musk reportedly refused an offer to join Twitter's board before putting in his bid. Musk's offer is non-binding and likely requires financing‚ but many analysts believe Twitter will accept his offer. In addition to Wedbush's Dan Ives‚ a leading analyst at Wedbush Securities‚ the company's stock is likely to drop a few more percent if Twitter rejects the offer. That means Twitter is likely to face a high profile among takeover candidates. Some analysts and investors have expressed concern over Musk's move‚ but it's worth noting that he's the world's richest person‚ with an estimated net worth of $259 billion. He's also already invested a large amount of money in other companies‚ such as the Boring Co. and Neuralink‚ which wants to implant computer chips into human brains. But analysts say that Twitter's bid is unlikely to pass the board's scrutiny. The company is valued at over $34 billion‚ making Musk's bid even more surprising. While he may not be able to take over the entire company‚ he would have the power to remove Twitter's board and oust the existing management team. Musk has said that Twitter should remain a free speech platform‚ but he would still be able to exercise influence over the company's management. The company's shareholders would have no way to know what Elon Musk's ultimate plans are. While Musk's offer to purchase Twitter has sparked concerns among investors‚ a recent report from Bank of America says that the board has been willing to fight for a better deal and to remain publicly owned. According to this report‚ if Musk fails to make the deal‚ Twitter's stock could drop to $34 or $37 per share. If the board accepts Musk's revised bid‚ the stock could jump to $60 per share. However‚ this is unlikely‚ as antitrust laws may prevent a deal with another tech company.
Twitter's poison pill strategy to prevent a hostile takeoverIn response to the Elon Musk takeover offer‚ Twitter has taken a unique approach. They have enacted a poison pill strategy to keep potential suitors from acquiring the company. This strategy does not require the board of directors to approve a tender offer‚ but it does prevent a hostile takeover from occurring. Musk could also make a case that Twitter is acting against its investors if he does sell his shares. The strategy has many advantages. First‚ it allows the company's current shareholders to purchase additional shares at a discount‚ thereby making their original shares worth less. It also allows the company to negotiate with a hostile bidder to extract a higher price from them. Second‚ it allows Twitter's shareholders to buy additional stock. Third‚ it can prevent a hostile takeover by limiting the rights of a potential acquirer. Another option is a flip-over strategy. Twitter is using this strategy to prevent a hostile takeover by allowing all its existing shareholders to buy discounted shares. The flip-in strategy will essentially dilute any hostile party's holdings by enabling the existing shareholders to buy more shares at a discount. Further‚ Twitter's poison pill strategy is also designed to protect its shareholders from being outbid by rivals. While Musk's potential deal with Twitter is not definitive‚ it shows that the company's founders are prepared for a long-drawn-out battle if he wants the company. The company's CEO‚ Parag Agrawal‚ has assured its employees that the company is stable and is focused on pursuing its mission. Meanwhile‚ few experts are willing to speculate on what may happen next. But one thing is certain: a hostile takeover will require an overwhelmingly favorable vote by the Board of Directors. The poison pill tactic has been around for some time‚ and it is not a new idea. In fact‚ it was first used by a New York legal firm in the 1980s. The name comes from the deadly pills that spies carried when they wanted to avoid interrogation. It was meant to stop a hostile takeover attempt from acquiring a majority stake in a company and negotiate with the company's shareholders.
Saudi Arabian shareholder's rejection of Musk's offerTweets from a Saudi prince rejecting Elon Musk's Twitter offer have caused the stock price to jump three percent. The tweet revealed that the Saudi prince's company owns 5.2% of Twitter‚ valued at SAR 3.75 billion (MAD 9.85 billion). Elon Musk responded to the tweet by asking the Saudi prince about his company's stake in Twitter‚ and he also said he's not sure if the offer will be accepted. If the Saudis don't like it‚ he had a Plan B to pursue the deal. Tweetstock soared on Thursday after Musk's offer was rejected. Twitter's board of directors is meeting to discuss the takeover offer‚ and the company was holding an all-hands meeting to discuss the deal. Twitter plans to disclose its share plan in a regulatory filing soon. In the meantime‚ if the deal doesn't go through‚ Twitter shares will fall. Musk's offer has caused a stir. The company's CEO has been in the news for months and has argued that a private company is the best way to restore trust with its users and serve the interests of free speech. The Saudi shareholder's rejection of Musk's offer has led many conservative pundits to suggest he buy Twitter and make the changes necessary to improve the company. The board's decision will likely come next week. On the other hand‚ the rejection by the Saudi Arabian shareholder has triggered a major reaction in the stock price. Musk's 3% stake in Twitter is the most popular among Twitter's investors‚ making the company's shares rise. The company's shares have risen almost 3% since Musk disclosed his holding in the company on Saturday. The decision signals his intention to take control of the company. While Elon Musk's bid was widely expected to fail‚ the rejection by the Saudi government does not mean the company will go under. The Saudi government has often censored and imprisoned journalists and media outlets. In fact‚ according to US intelligence‚ Saudi Crown Prince Muhammad bin Salman approved the killing of journalist Jamal Khashoggi‚ which led to a global uproar. In addition‚ the kingdom has long been ranked near the bottom when it comes to press freedom.
Twitter's board meeting with Elon MuskFollowing the news that Elon Musk has bought 9% of Twitter stock‚ shares of Twitter surged 3% on Thursday. Earlier‚ the company had announced that Musk would become a director. Musk has 81 million followers‚ rivaling the likes of Lady Gaga and Ariana Grande. However‚ Musk is not without his own controversy‚ getting into trouble with the SEC. Some analysts believe the Tesla Motors CEO has already taken a passive stake in Twitter. But some analysts believe he is likely to become an active shareholder and make a bid for the company. And the Tesla Motors CEO often finds himself in trouble with tweets containing controversial remarks. The board has yet to be convinced of Musk's proposal. But many Twitter users are eager to see the company move in a new direction. After tweeting that he was willing to take a $0 board salary‚ Musk's bid has caught Twitter's attention. After all‚ Musk has a 9.2 percent stake in Twitter and has publicly disclosed his intention to take it private. Twitter's board is scheduled to meet at 1pm ET on Thursday to consider Musk's offer. The company's all-hands meeting will follow at 5pm. Earlier this year‚ Musk settled with Tesla for $40 million in fines and agreed to hire a corporate lawyer to approve his tweets. Musk's tweets were controversial‚ and a tweet mentioning Tesla going private for $420 a share sent the stock's price skyrocketing. Musk is now in a difficult spot as he has to deal with the SEC.
Wow, with Jack departing, the Twitter board collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders. — Elon Musk (@elonmusk) April 16, 2022
Moving on … — Elon Musk (@elonmusk) April 24, 2022