Elon Musk was disappointed after the Twitter board adopted a poison pill plan against him, which has meant to frustrate his efforts of taking the company private. However he has now, uh, leached a new move that has left Twitter. Stunned. What is the lawns genius move and will it help him take over the company sooner than expected?
Join us today in this blog, as we explore Elon Musk's new move that has left Twitter stunned. If not shut. You will agree with me that Elon Musk is one of the smartest people of our time. Given the achievements that he has realized in the auto and space world, he is a genius who knows how to make his moves.
Musk's great contributions in engineering auto industry and rocket technology have been recognized by the Royal society of LA. Who have granted him, one of the most prestigious awards in the world as a fellow of the Royal society with such an award Elon is now at the same level with other renowned scientists, such as Isaac Newton, who was awarded in 1672, Albert Einstein, who became a fellow of the Royal society in 1921.
And Stephen Hawking who won the award in 1974, as the battle for Twitter gains momentum, Elan has made a move that has shocked the Twitter board. The smart engineer has made us smarter. After the world's richest man bought a 9.2% stake in Twitter. On the 4th of April, he was invited to the board of the American micro-blogging site by CEO Pirog Agarwal in a tweet that reads, I'm excited to share that we're appointing Elon Musk to our board, through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our board, but it was the same Twitter CEO who a few days later informed the world that Elan had rejected the.
Pirog tweeted saying Elan has decided not to join our board. I sent a brief note to the company, sharing with you all here. When you are Ilan, you do not just accept any good offer that comes your way. Sometimes you have to be bright enough to reject the good offers of today as you. I, the better offers of tomorrow in economics that is known as delayed gratification.
By the way, Elon Musk is a 1997 economics degree graduate from the university of Pennsylvania. As such, you can expect him to make the best investment decisions. In the case of Twitter, most people just thought that Elan had just rejected the offer because he was too busy with his other companies of space, X Neurolink and Tesla and the boring company.
But that was just far away from the truth. Musk had other plans that caught even the Twitter board by surprise, on the 14th of April Musk, surprise the world. When he made an offer of buying 100% stock in Twitter for $54 and 20 cents per. Which amounts to $43 billion Elan's offer was quickly rejected by Saudi prince Talal, who is the chairman of the kingdom holding company that has a 5.2% stake in.
The following day after Musk's offer the Twitter board had an urgent meeting with a sole agenda of finding a way of stopping the Tesla CEO from what they termed as a hostile takeover. At the end of the meeting, the board adopted the limited duration shareholder rights plan often referred to as a poison pill against Musk.
The method had an aim of scuttling. The tech billionaires plan of taking Twitter private. After the poison pill plan was implemented, the Tesla CEO had a number of options. The easiest one, he could just leave the takeover, exercise to be and continue holding his 9.2% stake in the company. Secondly, as the world's richest, man, he could add more money and meet the offer that the board was comfortable with.
And lastly, he could just sell his 9.2% stake in Twitter and invest the money elsewhere. But Musk has ignored all these options and has instead made a move that has shocked. After being rejected by the board, Elon Musk has decided to take the matter to the true owners of the social media platform, who are the shareholders Elan's move is known as a tender offer, which makes a direct appeal to shareholders to sell or tender their shares at a specific.
It is used in friendly deals, but its real value is to hostile bidders when the target company's board won't engage, which perfectly explains the state of the Twitter board. This new move has not just done the board, but also put them in a tricky situation. It will be an embarrassment to the board. If the shareholder decides to sell shares directly to Ilan, there is every possibility that the shareholders will side with the Tesla CEO, given that he has more followers on Twitter, then Twitter.
The tech icon has more than 83 million followers. While Twitter only has 61.5 million followers. Musk is also expected to outshine the board as he has more stake in the social media site. Then all 11 board members combined Musk has a 9.2% stake in the company. While the 11 board members have only 2.37% stake out of 2.3, 7% stake, 2.25% belongs to Twitter.
Co-founder Jack. This simply means that the other board members save for Jack heavy combined stake of 0.1, 2%. Elon has even a greater advantage given that Jack Dorsey is supporting him to fight them. In that case, the shareholders are likely to side with Jack and Elan. The shareholders have a lot of faith in Dorsey as the founder of Twitter, and they will also side with Musk as he is the richest man on the planet.
At least they can be sure that their financial concerns will be met when they are in the same ship with the wealthiest man on earth. Elan's tender offer is the perfect plan that will outdo the board's poison pill. Elan's withdrawal from Twitter as an investor is also another strategy that will ultimately make the Twitter shareholders.
Sue the board here is how it will play out. You can rest assured that the share prices of Twitter will decrease. As soon as the Tesla billionaire ditches, the company, this will be the exact opposite of what happened when Musk bought his 9.2% stake in Twitter. When share prices of the giant communication platform increased by 27%.
Initially Musk had put an offer, a $54 and 20 cents per share. When he wanted to take the company private on the 14th of April seven days later, he increased the share price to $58 and 60 cents Musk's offer is higher than the current Twitter share price of $48 and 93 cents. So when Musk removes his investment from Twitter, the share price may go even below $40.
This will be a big loss of the shareholders who will likely hold the Twitter board account. As such the shareholders are expected to Sue the board members for failing to sell the company when it was attracting the best price in the world of business board members of a company are expected to act in the best interest of the shareholders, which is termed as their fiduciary role.
Through his Twitter page. Elon has also warned the board of grave consequences as they have neglected their fiduciary obligation. Musk's tweet reads. If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty. The liability they would thereby assume would be Titanic and scale Musk's move of going.
The tender offer way will definitely carry the day as he has the support of his friend and Twitter. Co-founder Jack. With Jack's rich experience in Twitter, he will help Elon Musk to mobilize the shareholder so that they can accept his offer. This will be a big shame to the board that has tried to stop the takeover through all means possible.
Musk is super rich and will be willing to add some money to his initial offer for the benefit of sharing. He has so far secured about $25.5 billion in debt financing through Morgan Stanley, senior funding and other firms. Andy has also committed about $21 billion in equity financing. The Tesla CEO is a man who is known to win all fights.
He gets into, he makes his moves in a smart way more often than not. His moves catches rivals by surprise, which gives him an advantage over. The case of the Twitter takeover is no different. Elon Musk has made a smart move of buying the Twitter stock directly through shareholders through a plan that is known as the tender offer Elan's plan and wise move has caught the Twitter board by surprise.
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