Elon Musk Could Be Closer To Buying Twitter Than You Thought
It looks like Twitter might end up falling into Elon Musk's hands after all. According to a report from The New York Times, Twitter's board reportedly held discussions about Musk's offer to buyi the company at $54.20 per share, and continued to haggle with Musk in the early hours of Monday, April 25. Another report from The Wall Street Journal claims that both parties are in "advanced discussions" for handing Twitter over to Musk and that a final deal could be cemented on Monday. There is no guarantee that an agreement will be reached; however, both sides have reportedly discussed a punitive fee system that would kick into action if an agreement was reached but falls apart.
The past couple of weeks have been extremely tumultuous; soon after the SEC filing that documented Musk's "best and final" for buying Twitter went public, Wall Street experts raised doubts regarding Musk's capability to furnish the cash. A majority of Musk's wealth is tied to Tesla's stock, and to such an extent that Musk had to sell Tesla stocks to pay around $10 billion in taxes a few months ago. In addition to the doubt regarding Musk's ability to amass more than $40 billion, Twitter also adopted a "poison pill" strategy that would block Musk from increasing his stake in the company. His original deal with the social media company after Musk purchased tons of Twitter stock locked his maximum stake at 14.9%, a preventive measure that would thwart a hostile takeover.
Musk's path to owning Twitter
However, all the financial whispers were dashed when Musk officially outlined Twitter-buying finances, one that didn't involve directly offloading billions worth of Tesla stock. As per documents filed before the SEC, Musk revealed plans of securing $13 billion in financing from Morgan Stanley and a few other banks, a loan worth $12.5 billion secured via his Tesla stock, and $21 billion in equity without revealing the exact source for the latter. Musk's proposal made it clear that he was serious about acquiring Twitter, as he continued to take digs at the company's board via his tweets. The Tesla CEO even tweeted that if he manages to buy Twitter, the board of directors won't receive any compensation whatsoever. Soon after Musk detailed his financial plan, sentiments across Wall Street changed. More importantly, Twitter's board took notice of Musk's move and started discussing the road ahead internally, according to a report from the Financial Times.
It is worth noting that Twitter CEO Parag Agrawal never outright rejected an acquisition by Musk, adding that the company was considering all options on the table. Whether Musk manages to sway the board in his favor and get their nod remains to be seen. As for Musk's plan, he has repeatedly called out Twitter for failing to promote freedom of speech. Musk, who recently described himself as a free speech absolutist, has proclaimed that Twitter needs to be taken private to make hard changes.