What happened
Shares of Twitter (TWTR) were running 1.8% higher at 10:42 a.m. ET on Thursday after Elon Musk offered to buy the short-form messaging platform for $54.20 per share, or around $43 billion.
While the offer price is an 18% premium to Twitter's $45 close yesterday, Musk says the bid represents "a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced."
Image source: Getty Images.
So what
Musk created an uproar when he revealed a 9% ownership stake in Twitter and was subsequently granted a seat on the board of directors, pending a background investigation all nominees go through.
Musk opted not to take the seat, which also released him from the restrictions of being unable to buy more than 14% of the company's stock or trying to buy the company outright. His bid today, announced with the tweet "I made an offer," shows in what direction he wants to go.
I made an offer https://t.co/VvreuPMeLu
-- Elon Musk (@elonmusk) April 14, 2022
Now what
With the stock only rising 3% at the market's open, it's fair to suggest there's not a lot of faith that Twitter will accept the bid. Musk had also said that was his "best and final" offer for the company, and if it wasn't accepted, he would consider dumping all of his stock in the company.
Twitter has said it will consider the offer, as it has a fiduciary obligation to do, but with its stock having traded around $65 a share as recently as November, when much of the tech sector went into a tailspin, it's easy to believe the board will reject the buyout price as undervaluing the business.
