Section 1.1: The Crucial Questions Surrounding the Bid

Was Musk's bid genuine? Georgetown University Law Professor Urska Velikonja commented during a Yahoo Finance Live segment, "Musk's offer appears somewhat insincere compared to typical serious buyout proposals; it's more of an indication of interest rather than a firm commitment."

By pursuing the offer, Musk has defied skeptics. His actions often contrast with societal expectations, which is characteristic of his approach.

Was the offer substantial enough? Musk's offer of $54.20 per share totals around $43 billion. While that's a considerable amount, it may not be irresistible to Twitter, which has a market valuation near $37 billion. The 16% premium may not provide sufficient motivation for the board, especially considering Twitter's stock peaked at $77.63 in March 2021. Musk's bid comes at a precarious moment for the company, which might not work in his favor.

In comparison, other companies, like Microsoft, have recently invested $68.7 billion to acquire Activision Blizzard, indicating that there are potential buyers with deeper pockets. If Twitter were to be put on the market, those entities could drive the price higher.

Musk's Vision vs. Board Concerns

Despite the potential risks and the valuation questions, Musk's ambitions and public persona have elevated the significance of this deal.

Section 1.2: Board's Response to Musk's Offer

While the board initially welcomed Musk, they have shown little enthusiasm for his acquisition proposal. As of now, there has been no formal response, but they have implemented a defensive strategy known as the "poison pill" plan. This tactic allows current shareholders to purchase additional shares at a discounted rate, effectively diluting individual share value and making it costlier for Musk to raise his stake above 15%.

Additionally, the board's interests may be misaligned with any acquisition decision, especially since a successful buyout by Musk could jeopardize their positions. Musk has publicly indicated that board members would not be compensated should his bid succeed.

Musk Revives Deal for Twitter at Original Price

This video examines Musk's renewed commitment to acquire Twitter and its ramifications.

Musk's Strategic Maneuvers

Musk appears cognizant of the bid's valuation challenges but believes his expertise could benefit Twitter moving forward. However, this does not guarantee immediate financial rewards for current shareholders.

To address these concerns, Musk is actively seeking additional funding. Reports from the New York Post indicate that he is collaborating with Morgan Stanley to secure an extra $10 billion, alongside his current investment of $3.4 billion. He plans to involve co-investors while retaining majority ownership.

The Board's Dilemma

Yahoo Finance predicts that if the board dismisses Musk's proposal, Twitter's share price could plummet by 20%. Since October 2021, the stock has been in decline, increasing pressure on the board.

Moreover, Jack Dorsey, Twitter's former CEO, has publicly criticized the board, further complicating their position. If the board resists Musk's takeover, they risk facing backlash if the company's performance falters.

Florida Governor Ron DeSantis has even threatened to take action against the board for obstructing Musk's bid. Musk recently conducted a Twitter poll asking whether the decision to privatize Twitter should rest with the board or shareholders; 83% favored shareholder input.

A Unique Acquisition Process

Musk's relationship with the board has shifted dramatically, from collaboration to confrontation. His tweet suggesting a reduction in board members' salaries could further alienate them. The board likely preferred to find a more agreeable buyer rather than Musk, who has now cornered them into a precarious position.

If they choose not to sell to Musk, and the platform underperforms under new ownership, they may face significant scrutiny for their decision. Conversely, if Twitter goes private, it could lead to shifting ownership dynamics, potentially allowing Musk to acquire the company at a lower rate in the future.

Ultimately, the board opted for Musk's offer, acknowledging his track record of successfully managing enterprises. With Musk's acquisition of Twitter finalized for $44 billion, the implications for the platform and its governance are profound.

Final Thoughts

The business landscape has not witnessed an acquisition quite like Musk's. His strategic communications and decisive actions showcase his acumen. By navigating the complexities of the situation adeptly, he successfully secured Twitter within a month of his initial offer.