Reuters reported this morning that Twitter’s board may announce its acceptance of Elon Musk’s $54.20 per share buyout of Twitter.
The news agency cited “people familiar with the matter” in its report, noting that the sources said the deal could always collapse at the last minute.
The New York Times reported that Twitter’s board met with Musk on Sunday, and discussions continued into the early hours of this morning.
Musk buys 9.1% of Twitter April 4making him the company’s largest shareholder.
Twitter announces Musk will join its board; however, Tesla’s CEO April 9 Via Twitter, he rejected the offer.
If he accepts the board seat, Musk’s stake in Twitter will be limited to no more than 14.9% during his tenure, plus 90 days.
Can Musk really afford Twitter?
In short, yes.
But that requires some creative financing.
While most acquisitions are largely funded by securing debt with the assets of the target companies, Musk reportedly has other plans.
According to reports, Musk plans to use his assets to fund two-thirds of the $46.5 billion financing plan.
Reuters, again citing sources familiar with the matter, said the banks involved had not seen enough cash flow on Twitter to justify taking on more debt.
Part of Musk’s financing included a $12.5 billion margin loan backed by his Tesla stock.
A regulatory filing states that the loan expires if Tesla’s stock price falls by 40%.
Musk described the acquisition of Twitter as “extremely important to the future of civilization,” and in fact, the numbers seem to suggest that potential profit isn’t his main driver.
Whether Musk-led Twitter holds the keys to civilization is debatable.
almost certainly The platform that transforms digital marketers.
A more open, looser Twitter could pose greater risks for brands trying to navigate two-way customer communication and advertising channels.
However, Musk’s experience with online payments could be a valuable asset for Twitter, especially for its social commerce strategy.
Story development…
source:
Twitter to accept Musk’s original $43 billion offer, Reuters
Analysis: Musk rips up takeover playbook with $46.5 billion in Twitter financing, Reuters
Twitter is close to a deal to sell itself to Elon MuskNew York Times
Featured Image: Shutterstock/Kaspars Greenwald
