Elon Musk has offered to buy Twitter for $54.20 a share in cash, valuing the company at about $43 billion and saying he wants to take the company private. Twitter stock fell.
Musk revealed his plan in a securities filing late Wednesday, which Twitter confirmed Thursday. The announcement comes a little more than a week after Musk revealed his 9.2% stake in the company.
"I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy," Musk said in the SEC filing.
He went on to say: "However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company."
Twitter Stock Falls
Shares fell 1.7%, closing at 45.08 on the stock market today, and well below the offer price.
Musk said the offer represents a 54% premium on Twitter stock compared with the day before he began investing in the social media giant. It also comes in 38% higher than pricing the day before his earlier investment became public.
"Twitter has extraordinary potential. I will unlock it," said Musk.
Twitter confirmed it received "an unsolicited, nonbinding proposal from Elon Musk" in a news release Thursday.
"The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders," it said.
Musk Pokes Twitter Chairman
Musk contacted Bret Taylor, independent board chairman at Twitter, in a text message late Wednesday.
"I am going to send you an offer later tonight. It will be public in the morning. Are you available to chat?" he wrote in the message, according to the filing. Taylor is co-CEO at Salesforce
The filing also included a voice script from Musk.
"I am not playing the back and forth game. I have moved straight to the end," he said.
"It's a high price and your shareholders will love it," Musk went on to say. "If the deal doesn't work, given that I don't have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder."
Following that, Musk sent the formal offer.
'Enough To Get Investors Excited'
"(A) $54 cash offer is enough to get investors excited and force (the Twitter management) team to take it serious and react," Mizuho analyst Jordan Klein said in a note to clients.
"That said, (the) TWTR mgmt. team (is) in a very tough spot. Sounds like Musk does not trust them nor want them to run the company," Klein wrote. "So accepting this offer means they are gone. Not good."
Twitter is set to report first-quarter results on April 28, after the market close.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
