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Musk In Talks With Investors To Join His Bid To Take Over Twitter: Report

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OPINION: This article may contain commentary which reflects the author's opinion.


Tesla CEO Elon Musk has reportedly spoken with other investors about joining his bid to purchase Twitter. This comes a week after he formally offered last week to completely buy Twitter for just over $40 billion.

“One possibility, the sources said: teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private. Silver Lake’s Co-CEO Egon Durban is a Twitter board member and led Musk’s deal team during the 2018 failed effort to take Tesla private, sources said. Silver Lake declined to comment,” the New York Post reported.

“For its part, Twitter on Friday adopted a so-called poison pill — a corporate move that prevents Musk from acquiring more than 15% of the company. But that pill may not stop other entities or people from acquiring their own shares of up to 15% of the company. Those owners could partner with Musk to force a sale, make changes in the executive ranks or push for other overhauls of the company,” the report added.

“This is not over,” a source told the New York Post.

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A report from Business Insider details how Musk has three viable options moving forward.

“Now that Twitter has adopted a poison pill to prevent a hostile takeover of the company, Elon Musk has three pathways forward, according to a Monday note from Wedbush. Musk made an unsolicited bid for Twitter at $54.20 per share last week, representing a total market valuation of about $43 billion. That was after he acquired more than 9% of the company and toyed with the idea of joining the company’s board of directors,” the report began.

“But since Twitter adopted a poison pill, Musk tweeted “Love me tender,” hinting at the possibility of a tender offer to take over the company and sidestep the adopted poison pill. According to Wedbush analyst Dan Ives, he can now formally lay out his financing strategy, which would likely include taking on debt with his Tesla and SpaceX stakes as collateral, as well as a vision for the social media company going forward. That vision could entice investors who have seen virtually no return in the stock since it went public,” the report stated.

A second path for Musk would be to find a strategic partner for the bid and increase it to about $60 per share, “which seems to be a more appropriate level in the eyes of many Twitter shareholders that could get the deal over the goal line,” according to Ives.

“The third option would be for Musk to hit the sell button and exit his position which we view as unlikely (at this point),” Ives said. But all of these pathways could change if a separate interested party steps into the takeover of Twitter.

“In a nutshell, this week is very important for all the parties involved in this Twitter soap opera with time to get out the popcorn,” he concluded.

During a TED talk last week, host Chris Anderson asked Musk if there was a “Plan B” if his current offer to buy Twitter in an all-cash deal were rejected.

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“There is,” Musk said.

“Well, I think we would want to err on — if in doubt, let the speech — let it exist. If it’s a gray area, I would say let the tweet exist. But obviously, in a case where there’s perhaps a lot of controversies that you would not want to necessarily promote that tweet, you know. So, I’m not — I’m not saying that I have all the answers here, but I do think that we want to be just very reluctant to delete things and have — just be very cautious with permanent bans. You know, timeouts, I think, are better than sort of permanent bans,” he continued.

“But just in general, like it said, it won’t be perfect, but I think we wanted to really have like the perception and reality that speech is as free and reasonably possible, and a good sign as to whether there is free speech is, is someone you don’t like allowed to say something you don’t like? And if that is the case, then we have free speech. And it’s damn annoying when someone you don’t like says something you don’t like. That is a sign of a healthy, functioning free speech situation,” he added.

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