Elon Musk hints at a possible Tender offer for Twitter shares if the Twitter board rejects his proposal to purchase 100% of the company’s shares.
The world’s richest man Elon Musk seems to be relentless in his efforts to take over Twitter. The Tesla CEO has taken to Twitter to post cryptic messages about his intention for the platform. This has led to speculation about Musk making a Tender offer for the microblogging platform.
Yesterday, Musk posted the tweet above, with many believing it to be a disguised reference to F. Scott Fitzgerald’s masterpiece “Tender Is the Night,”. This speculation has given credence to another cryptic tweet the Space X flounder made over the weekend. He tweeted “Love Me Tender,” the title of an Elvis Presley song. Both messages have led to many believing that a Tender offer for Twitter shares may be imminent.
The Latest Twist In The Ongoing Saga
A tender offer for Twitter shares may be the next course of action for Musk as he bids to make Twitter a private corporation. However, the move is predicated on the platforms board rejecting his offer of $43 billion to buy the company outrightly.
Going by the posturing and actions of Twitter’s board, a tender offer may be the likely outcome. After musk’s proposal, the board voted unanimously to adopt a limited duration shareholder rights plan, often called a “poison pill,” after musk’s offer. The decision was made to fend off the possibility of a hostile takeover.
Before the latest twist, Musk had forgone a board membership seat after briefly becoming Twitter’s largest shareholder. After acquiring a 9.2% stake, Vanguard group also increased its stake in the company to 10.3%. Many believe Musk rejected a board seat to enable him to buy more shares, and they proved right after his bid to own the company entirely.
One year share price of Tesla stock. Source: Yahoo Finance
Consequently, as things stand now, a Tender offer is very likely if Musk intends to own Twitter at all costs. The chart shows that the entire saga has led to Tesla’s share price trading to the downside. The stock went as high as $1,149 at the start of the month. Since then, it has lost nearly 15% of its value and currently trades for $977.
Many fear that Tesla’s CEO would have to sell some of his share in the company if he is to buy out twitter privately. This has sent a negative image to the company’s shareholders hence the selloff.
Twitter Board Comes In For Criticism Following Decision To Play Hard Ball
The Twitter board continues to receive flak over what many now consider to be a breach of their fiduciary duty. The governor of Florida hinted that this state, which owns shares in Twitter via the Florida pension, may take action against the board.
Aside from Florida’s governor, former Twitter CEO Jack Dorsey has also taken aim at the social media’s board. In a flurry of Tweets, Dorsey, a board member, said that Twitter’s board has “consistently been the dysfunction of the company.” He further revealed that he had so much to say but could not when questioned about his time as CEO.
Social Volume With Crypto Communities. Source: Santiment
Importantly, it is essential to note that both Dorsey and Musk are big crypto proponents, so the saga has piqued the community’s interest. As seen above, data from Santiment shows that conversation around this topic peaked on April 14. Since then, it has maintained decent traction showing that the crypto community is interested in the saga.
The Musk-Twitter saga is throwing up exciting twists and turns. It would be interesting to see if must gets his way and eventually make Twitter private or the board gets in his way. Whichever way the pendulum swings, the results would be interesting.
Do you think Musk’s Tweets are a cryptic hint toward a Tender offer for Twitter’s share? Let us know your thoughts in the comments below.
Chris is a crypto enthusiast and a firm believer in the blockchain’s ability to create a new financial paradigm. Through writing, Chris hopes to expose the intricacies of this disruptive technology and how it is beneficial to Africans and developing countries. He aims to give readers a rational and unbiased outlook of the industry by equipping them with the necessary information to make enlightened investment decisions.
