(PresidentialWire.com)- Elon Musk, the enigmatic founder of Tesla and SpaceX, is attempting to take over Twitter now, too.
He apparently doesn’t have any confidence in the management team that’s in place at the social media giant, and so he’s attempting to seize control of the company.
On Thursday, news broke of Musk’s effort to purchase Twitter for $54.20 per share. He would be purchasing the company with cash, information that was made public through a Schedule 13D that was filed with the Securities and Exchange Commission.
Via his own account on Twitter, Musk said “I made an offer” for the company, and then sent a link to the direct filing with the SEC. Included in that filing is a lot of detail that he provided on why he was trying to take over.
One such document included in the filing is a letter that Musk sent to Bret Taylor, who currently serves as Twitter’s chairman of the board and also as the co-CEO of SalesForce.
It’s a short note, but it’s rather powerful. In it, Musk writes:
“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.
“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.”
Musk writes that he believes the social media giant has “extraordinary potential” and that “I will unlock it.”
He includes his offer terms in the letter, which he said is his “best and final offer.” He even threatens to “reconsider my position as a shareholder” if the offer isn’t accepted.
In other words, either accept my takeover offer, or be prepared to lose me as an investor, is what Musk is saying to Taylor.
Musk’s offer is to purchase all the shares of Twitter, which he would then make a private company. He writes that his offer price of $54.20 per share is a 54% premium over the price when he started investing in Twitter, and a 38% premium over the price for the day before Musk’s investment was publicly announced.
On Friday, Twitter counter-attacked, using what is known as a “poison pill.” It’s an effort by the company to try to block or slow Musk’s purchase of their firm, which would total $43 billion.
The New York Times explains the poison pill strategy as such:
“[It] essentially lets a takeover target flood the market with new shares or allow existing shareholders other than the bidder (Musk in this case) to buy them at a discount. That means anyone trying to acquire the company must negotiate directly with the board.
“The pill will be triggered once any individual or group of people working together buy 15% or more of Twitter’s shares. Mr. Musk currently owns more than 9%.”
Twitter announced that this plan would be in place for one year, and also wouldn’t prevent them with negotiating with another potential buyer for a full sale of the company. The poison pill, according to the company, buys them time to negotiate a purchase deal.
