Image Courtesy of the Guardian
By Chris Carey
By all means, Elon Musk does not shy away from controversy or the spotlight. The richest person in the world has made waves in many markets be it electronic vehicles with his company Tesla, his venture with SpaceX into privatized space flight, or even attempts at comedy with Saturday Night Live.
Most recently, however, Musk has indicated an interest in expanding his multi-sector empire into social media with a very public offer to purchase the social media company, Twitter, at more than $54 per share. The offer, delivered on Wednesday, April 13, was a follow-up on Musk’s previous purchase of 9.2% of Twitter’s shares, making him the single largest shareholder of the company.
Musk has been critical of Twitter’s management and company policies in the past, most notably its free speech policies on the platform. He has also taken aim at the new subscription service called “Twitter Blue,” as well as some in-app features such as the absence of an “edit tweet” button which consumers have demanded nearly since the inception of the app in 2006.
Brief controversy followed Musk after he bought a plurality of shares sometime in March. Initially, as announced by Twitter’s CEO, Parag Agrawal, Musk was to join the board of directors of the company; however, on the day of his planned appointment, he took a step back and chose not to ascend to the board.
Agrawal tweeted a statement that included the line reading, “Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board…I believe this is for the best.” Since then, there has been a series of cryptic messages from Musk’s Twitter account, including liking tweets that imply he was restricted from speaking his mind in an official capacity on the board which would be antithetical to his initial purpose of buying the shares he did.
Most recently, Musk announced that he planned to purchase the entire company, and made an offer to Twitter of $46.5 billion. On April 21, Musk further announced that he had secured the necessary funding to make the purchase happen should Twitter, which has noted reluctance but that it is considering the offer, accept his valuation and artistic direction.
As a response to Musk’s preparations, the Board of Twitter approved a company policy that should Elon purchase more than 15% of the publicly traded shares of the company, then all of the other shareholders, excluding Musk, would be able to purchase shares at a reduced price, thus reducing the value of each individual stock and making it more difficult for Musk to take over the company without board authorization.
Now, the two parties are at a standstill, with the ball in Twitter’s court. Musk has confirmed that with various financing plans, he will be able to follow through on his $46.5 billion offer. As such, Twitter now must consider whether the offer is too good to refuse, or whether Musk’s difference in opinions from the current company’s trajectory is too serious to concede ownership.