Elon Musk pushed his chips all-in in his faceoff with Twitter, sending the social media giant an unsolicited takeover offer to buy its remaining outstanding shares for $43 billion.
Musk said that the reason for the takeover attempt was to “unlock” Twitter’s potential to be “the platform for free speech around the globe” in a regulatory filing with the SEC.
In a letter addressed to Twitter Chairman Bret Taylor, Musk wrote that “since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form.”
And if the deal or something like it succeeds, it could leave one of the largest employers in San Francisco in a tenuous spot.
Musk said that he is seeking to acquire the company and take it private because of a lack of confidence in current management and an inability to drive changes he considers necessary in the public market. He wrote that if his offer is not accepted, he would reconsider his position as a company shareholder.
Musk revealed this week that he had become the company’s largest individual shareholder, owning roughly 9.1% of the company. In response, Twitter leadership invited Musk to join the company’s board. The billionaire rejected that offer, which came with the condition that he would not increase his ownership stake to more than 14.9% while serving in the role.
The $54.20 purchase price he offered for the company’s outstanding shares was a 38% premium over the company’s closing share price on April 1—an enticing offer in the eyes of some Wall Street analysts.
It remains to be seen whether any such detail will materialize: During an appearance at the TED 2022 conference in Vancouver on Thursday, Musk said he’s “not sure” if he will actually be able to buy Twitter and hinted at a “Plan B” if his offer is turned down.
Nonetheless, Musk’s effort to take the company private under his ownership could pose serious implications for Twitter’s presence in San Francisco, where it was founded back in 2006.
The social media company was the subject of a controversial tax break under late Mayor Ed Lee that relieved its payroll tax burden as part of a decision to set up its headquarters in the Mid-Market neighborhood, where it still sits—albeit mostly unused during the pandemic.
Twitter currently leases around 700,000 square feet of headquarters space at 1355 Market St., but announced a permanent remote working policy allowing employees to work where they choose in a “distributed working” model.
The company is one of the largest tech employers in the city, employing an estimated 2,000 employees in San Francisco, according to research from the San Francisco Business Times. Its departure would be a major blow to the city’s status as a global tech hub.
In a since-deleted tweet, Musk posed a poll question to his followers that suggested converting the company’s San Francisco headquarters into a homeless shelter. The post prompted a response by Amazon founder and chairman Jeff Bezos, who posted about the homeless shelter attached to Amazon’s own Seattle headquarters.
Musk, a longtime California resident who relocated to Texas in 2020, jabbed the region on his way out by stating at a public forum that “the Bay Area has too much influence on the world, in my opinion.”
The decision to move his residence to the Lone Star state was followed by a relocation of electric car maker Tesla’s headquarters from Palo Alto to Austin. SpaceX, the other company that Musk leads as CEO, still has its headquarters in Hawthorne in Southern California. Musk has an estimated net worth of $265 billion, mostly tied up in stock.
It’s unclear if Musk would be able to drum up the financing necessary for the takeover, but he has enlisted Morgan Stanley as an advisor. Twitter has enlisted Goldman Sachs to help review the offer and advise the company’s management on its next moves.
Musk is a prolific tweeter, with some 81.7 million followers on the site. However, his activities on the platform have frequently raised the ire of regulators and critics.
Musk was unsuccessfully sued for defamation after he called a British cave explorer a “pedo guy” in a 2018 tweet. In another instance, the SEC accused Musk of securities fraud after he posted that he had “funding secured” for a deal to take Tesla private at $420 per share.
Under the terms of that settlement, Tesla installed a “Twitter sitter” tasked with reviewing Musk’s tweets. In March, however, the tech tycoon challenged that SEC settlement in court.
Kevin Truong can be reached at [email protected]