Experts, however, say Musk’s offer may not be accepted by the Tesla’s board
Tesla tycoon Elon Musk’s hostile takeover bid of Twitter is being seen by analysts as a battle for control of all powerful algorithms that influence our newsfeeds. They feel it could be the change that Twitter needed though at the same time, there are misgivings about the impact of taking the popular media platform private, especially on free speech and narratives.
On Thursday, Musk announced in a filing with the US Securities and Exchange Commission that he had offered to buy Twitter for $43 billion, for $54.20/ share in cash. He said, “Twitter has extraordinary potential. I will unlock it.”
His offer price represents a 38 per cent premium to Twitter’s April 1 close, the last trading day before the controversial billionaire’s 9 per cent stake in the microblogging platform was made public.
‘Won’t be accepted’
Kashyap Kompella, CEO of global technology industry analyst firm RPA2AI Research, felt that Twitter’s value as the world’s townsquare was not reflected in this valuation. “Elon Musk’s offer won’t likely be accepted by the board on financial grounds because the offer is at a premium to their current share price but lower than the high watermark price,” he said.
Also as Kompella pointed out, “There are deep issues about private companies and private billionaires having so much sway on public opinion, electoral outcomes and popular narratives of the day.”
Tesla tycoon’s bid for Twitter seen as battle for control of algorithms
Sanchit vir Gogia at Greyhound research said that Elon Musk must be credited for the timing of the offer. “Twitter has only recently seen leadership and board changes, which has been a source of displeasure and panic for many shareholders. Not everyone is aligned with Twitter’s current product strategy and overall management approach. The fact that the company’s stock has been somewhat choppy over the past year confirms the need for immediate change at Twitter.”
Lloyd Mathias, Business strategist and Independent Board Director, called Elon Musk’s offer to buy out Twitter and take it private as bold and audacious. “But it is completely in keeping with his disruptive thinking and his recasting of every business he’s stepped into – EVs, Space Travel or tunnel transportation.”
Going by his tweet polls over the last few days, Mathias felt that Musk clearly sees bigger monetising possibilities than the current management had envisaged in the platform.
Giraj Sharma, founder of Behind the Moon brand consultancy, said, “The first thing that strikes me is that Elon Musk will bundle Twitter with Starlink through SpaceX. And that will increase the user base phenomenally.”
However, he pointed out that Musk had not revealed how he will exploit the ‘tremendous potential’ he sees in Twitter and how he will make it the epitome of free speech as yet. “But somehow the free speech bit sticks,” he says.
Published on
April 14, 2022
