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Elon Musk Buying Twitter?
The saga continues
Last week, 50 year old billionaire Elon Musk offered to buy Twitter. At the time he made his offer, he owned a little over 9% of the company’s shares.
According to Parag Agrawal, the CEO of Twitter, Musk became Twitter’s largest shareholder. He maintains this status today.
Musk offered to buy Twitter shares at an over-valued price of $54.20. For shareholders, this would be a windfall. It would offer a valuation of $43 billion for the social network giant. Musk stated that he thought Twitter had the potential “to be the platform for free speech around the globe”.
These events occurred after Musk decided to abstain from Twitter’s board of directors. While Agrawal initially welcomed Musk to Twitter’s board of directors, the company also capped Musk’s ownership of Twitter at 15%.
At that point, Musk abandoned plans to join Twitter’s board. This caused Twitter’s stock to tumble over 8%. However, it eventually closed the day up 1.69%.
Since Musk backed out of joining Twitter’s board, it did not respond to his offer by rejecting his offer to buy the company. However, it introduced what is known as a “poison pill” into the equation.
A poison pill is used as a defensive strategy by a target firm to prevent being acquired in a…
