Any moment now, a deal between between Twitter’s 11-member board and Elon Musk could be announced. The news of how real this deal could be comes from an unspecified number of anonymous sources in a report by Reuters and two unnamed sources in a report out from The New York Times. Or maybe this all could still be a troll, trolling. After all, if you’re the richest man in the history of the world, why not spend more than $US43 ($60) billion on a bad joke.
Although the deal is unconfirmed, both the Times and Reuters reported that sources tell them a deal could be finalised and made public later today. First, the board has to recommend the sale to Twitter’s shareholders. But the deal could certainly still fall through. As of writing this, neither Twitter nor Musk have responded to Gizmodo’s request for comment.
If Musk makes the purchase, Twitter would no longer be a publicly traded company, but instead, private. Musk’s vying to purchase the social media company as an individual, and not through Tesla or SpaceX, reported Reuters.
In response to the news, Twitter share prices have been fluctuating. In premarket trading, they reached about $US51.50 ($71) per share, but at the time of writing, had fallen to around $US50.7 ($70).
Musk first announced his offer to buy the social media company at around $US54.20 ($75) per share on April 14. Since then, he’s demonstrated that he does, in fact, have the capital to back the offer, with about $US46.5 ($65) billion in liquid funds supported by his own direct assets as well as financing from Morgan Stanley Senior Funding, Bank of America, Barclays, Citibank, and others.
Twitter’s board instituted a “poison pill” on April 15, allowing shareholders to buy company stock at a discounted rate if any single shareholder were to acquire more that 15%. The board made that decision, presumably, to prevent Musk from enacting a hostile takeover, i.e. outright purchasing ownership of Twitter by buying up shares without consulting the board.
Musk already owns a 9.2% stake in the company, which he bought in early April after repeatedly using the platform to Tweet out his thoughts on “free speech” and how the site’s bans and content removal policy “fundamentally undermines democracy.” Also in April, he was in discussions with the Twitter board about joining their ranks before it became clear that that meant he wouldn’t be able to purchase more than 14.9% of the company’s stock. Oh, and as we all watch this play out, we should also note that this whole thing isn’t exactly sitting well with many Twitter employees.