Will Donald Trump return to Twitter after Elon Musk offers to buy the platform?
After recently buying a large stake in Twitter, Tesla CEO Elon Musk has now offered to buy the platform for more than $40bn.
Musk only purchased a 9.2% stake in the social media platform last week, but today the tech entrepreneur offered $54.20 a share in cash to purchase the company. According to data from the financial information provider Refinitiv, this is based on 763.58m shares outstanding, costing $41.4bn (£31.5bn) in total.
That share offer price would be a 54% premium to Twitter’s closing price on 28 January, the day before he began investing in the platform. However, following today’s purchase offer, Twitter shares jumped 11% in pre-market trading to $50.90.
Sophie Lund-Yates, Lead Equity Analyst, Hargreaves Lansdown, comments on the announcement: “Elon Musk’s unsolicited offer to takeover Twitter has shocked the market. However, the move shouldn’t come as too much of a surprise, when his decision not to take up a seat on Twitter’s board strongly suggested a takeover was in Musk’s thoughts. The move has been positively responded to by Twitter’s shareholders, but there are plenty of hurdles to clear before anyone signs on a dotted line.
“Elon Musk thinks Twitter’s potential is stifled by current management and its position as a public company. Changing either of those things is an enormous move, and one that will sting the ego of the existing management team. The premium being offered by Musk to takeover the company suggests he thinks very highly indeed of what Twitter could be, but not what it is at present.”
Would this be a win for free speech and could it signal the return of Donald Trump to Twitter?
Elon Musk has long been an advocate for free speech and reiterated his stance on this in a letter sent to Twitter Chair, Bret Taylor, which was quoted in the Guardian.
“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 wrote in the letter to Taylor.
“However, since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.
“As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder. Twitter has extraordinary potential. I will unlock it.”
With Musk being so highly outspoken when it comes to free speech, does this mean that Donald Trump, the former US President who was permanently suspended from Twitter because of tweets that were deemed to incite violence, will be reinstated?
Matt Gubba, CEO and Founder of Biz Britain, thinks Musk’s takeover bid has the potential to transform Twitter into a platform for free speech.
He comments: “Censorship on Twitter has become a real problem recently, and one which I believe is now completely out of control. The hostile takeover bid launched by Elon Musk has the potential to transform the platform and return it to a forum where open discussion and free speech are encouraged. This can only be a good thing for both Twitter and its users. Free speech is a critical part of our free society, and its suppression must never be tolerated.”
We can only speculate what will happen at this point, but if Musk’s takeover bid is accepted, it will be very interesting to see what changes will take place.