Musk Launches a $43 Billion Bid for Twitter in Order to Construct an 'Arena for Free Expression.'

Musk made the proposal in a letter to Twitter's board of directors on Wednesday, and it was made public in a regulatory filing on Thursday. Twitter is a microblogging network that has evolved into a worldwide method of communication for people and international leaders. His bid price of $54.20 a share represents a 38 percent premium to Twitter's April 1 close, the last trading day prior to the public disclosure of his 9.1 percent position in the social media network.

Musk, the world's wealthiest person with a fortune of $273.6 billion, declined an offer to join Twitter's board of directors on Saturday after reporting his position, experts say, signaling his takeover aspirations since a board seat would have restricted his interest to just under 15%.

Musk hinted at the potential of a hostile bid after his TED address, tweeting: "It would be totally inexcusable not to bring my offer to a shareholder vote."

According to a source, Twitter was examining the offer with the assistance of Goldman Sachs (NYSE:GS) and Wilson Sonsini Goodrich & Rosati. Additionally, the person added, the firm was developing a poison pill as a safeguard against Musk upping his share as early as Friday.

Twitter's stock fell 1.7 percent on Thursday. Investors were skeptical.

Saudi Arabia's Prince Alwaleed bin Talal tweeted about the sale from his verified account. He described himself as one of Twitter's "biggest and longest-standing owners," and stated Musk's offer undervalued the firm, which he rejected.

Musk, for his part, said on Twitter that this was his "best and last offer" and that if the board rejects it, he would reevaluate his investment.

"This is not a means to an end," Musk said during his TED Talk.

"I have a strong gut feeling that having a publicly trustworthy and widely inclusive platform is critical for the future of civilization," Musk concluded.

Musk, a self-described "free speech absolutist," has been critical of the social media platform and its restrictions, and recently conducted a survey on Twitter to see if people feel it conforms to the ideal of free speech. Over 70% of the 2 million votes cast were negative.

Musk tweeted in response to Twitter's decision to ban former President Donald Trump over concerns about incitement of violence following his supporters' attack on the US Capitol last year: "A lot of people are going to be extremely unhappy with West Coast high tech as the de facto arbiter of free speech."

Trump said in comments Wednesday – before Musk's revelation – that he "probably would not have any interest" in returning to Twitter, where he had over 88 million followers.

Karine Jean-Pierre, a spokeswoman for the White House, refused to comment on Musk's bid for Twitter, stating that market regulators are independent of political leadership.

On Thursday, Twitter workers, some of whom were fearful of Musk's influence on the company's capacity to censor material, gathered for an all-hands meeting. According to a source, Chief Executive Officer Parag Agrawal reassured them that the firm was not being "kept hostage" by rumors of Musk's approach to purchase the company.

Musk said that Morgan Stanley (NYSE:MS) acted as the financial consultant for his offer. He did not elaborate on how he would fund the acquisition if it proceeds, but assured the TED conference audience that he "had adequate assets."

According to CFRA Research analyst Angelo Zino, Musk may fund the transaction via debt and the sale of Tesla stock.

Musk sold more than $15 billion worth of Tesla stock last year to satisfy a tax requirement. That represents nearly 10% of his interest in the electric car producer.

'PERFORMER WITH A RECORD OF UNDERPERFORMANCE'

Twitter's recent lower-than-expected user growth has cast doubt on the company's growth prospects, especially as it pursues large-scale initiatives such as audio chat rooms and newsletters.

Twitter, which was founded two years after Facebook (NASDAQ:FB), is dwarfed by the social network. Meta, the company that owns Facebook, expects to make $118 billion in income from its 1.93 billion daily users in 2021. Last year, Twitter generated $5.08 billion in revenue from its 217 million active users.

"The critical decision for Twitter's board of directors today is whether to accept a very generous offer for a firm that has been a chronic underperformer and has a history of treating its customers with apathy," said Michael Hewson, chief market analyst at CMC Markets.

According to a person familiar with the matter, Twitter will not make a decision on Musk's proposal on Thursday. The board is now deliberating on the criteria for the valuation procedure, after which it will ask its experts to assess the proposal and await the outcome, the person added.

Since joining Twitter in 2009, Musk has garnered over 80 million followers and has used the platform to make major announcements. Musk is bound by a 2018 settlement with the United States Securities and Exchange Commission, which requires him to receive pre-approval for certain Twitter postings after his tweet claiming to have "financing secured" to take Tesla private.

"If he truly wants to take Twitter private, his previous run-ins with regulators may not be an impediment – but they may make potential financing sources wary of providing the cash for the deal – unless he is willing to pledge a sizable portion of his Tesla holdings as collateral," said Howard Fischer, a partner at Moses & Singer and a former SEC senior trial counsel.

Musk's decision also boosts the possibility of further bids purchasing Twitter.

"It will be difficult for any other bidders/consortium to emerge, and the Twitter board will almost certainly accept this proposal and/or initiate an aggressive sale process," Wedbush Securities analyst Daniel Ives said in a client note.

Musk acknowledged at the conference that success was not certain, but his goal was to retain as many stockholders as the law permitted in a private firm.

When asked whether there was a "Plan B" in case Twitter rejected the offer, Musk said succinctly: "There is."