The shares rose nearly 7.5% to close at $48.45 in the second full trading day since Thursday, when the Tesla CEO made what he called a “last and final offer” to buy the social media company. The move was a big surprise, including to Twitter. The board quickly put in place a “poison pill” to thwart a hostile takeover even as they said they were considering Musk’s bid.
“Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there,” Musk tweeted Monday (responding to a tweet listing the salaries of Twitter directors).
Musk had previously tweet-slammed the board that he said “collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders.” That didn’t include Twitter founder and former CEO Jack Dorsey, who does own stock but is planning to step down from the board at the company’s annual meeting in May,
In a few unusual tweets of his own, Dorsey slammed the Twitter board too, saying, “it’s consistently been the dysfunction of the company” and quoting what he called a “Silicon Valley proverb”: “Good boards don’t create good companies, but a bad board will kill a company every time.”
Dorsey stepped down as chief executive last November. Twitter’s chief technology officer Parad Agrawal now has the reins.
Twitter’s stock was buoyed in part by speculation that others bidders might jump in. Apollo Global Management has been talking with various firms about helping to finance an offer but there’s nothing concrete. The WSJ reported today that one potential bidder could be private equity firm Thoma Bravo LP.
Companies from Disney to Salesforce.com have considered acquiring Twitter in the past but backed off. If Musk raises the funds, most Wall Streeters seem to think the board should jump on his offer, which is rich for a business that despite being a household name has struggled to grow and produce meaningful cash flow.
Multi-billionaire Musk is the world’s richest man on paper but the deal, that values Twitter at $43 billion, would be tough to close even for him. He insisted he’ll be able to raise the funds. Musk has hired Morgan Stanley as an advisor. Twitter retained Goldman Sachs.
Musk has hinted in yet another tweet that Twitter’s board might not have a choice. “Love me tender,” he wrote, quoting Elvis, and indicating a hostile tender offer may be coming. That’s an offer to purchase shares of a company made directly to its shareholders, bypassing management.
Some analysts who cover Tesla have been less than thrilled with Musk’s newest distraction given that he’s already got a pretty full plate overseeing Tesla, SpaceX and several others businesses.
Musk has cast himself as a fighter for free speech, talking last week about the need to foster democracy in the U.S. and abroad by reducing content moderation on Twitter.
Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there
— Elon Musk (@elonmusk) April 18, 2022