Shares of Twitter jumped 5% in pre-market trading on Monday as several US media outlets reported that the board of the social media giant was nearing a buyout deal by its largest shareholder Elon Musk, after initially attempting to reject the billionaire businessman's bid
NEW YORK (Pakistan Point News / Sputnik - 25th April, 2022) Shares of Twitter jumped 5% in pre-market trading on Monday as several US media outlets reported that the board of the social media giant was nearing a buyout deal by its largest shareholder Elon Musk, after initially attempting to reject the billionaire businessman's bid.
Musk, who already owns a 9.1% stake in Twitter through a nearly $3 billion purchase made from the open market earlier this month, is offering $54.20 for each remaining share of the microblogging site that he does not already own to delist the company from the New York Stock Exchange and take it private. Twitter shares rose to above $51.50 in pre-market trading, versus Friday's close of $48.93, after media reports that a deal was imminent.
CNBC reported that the Twitter board had a change in stance toward Musk's offer after he made a securities filing on April 21 that he has received financial commitments of $46.5 billion to fund his offer. The Wall Street Journal reported that the two sides met on Sunday and a deal could be concluded as soon as this week.
An agreement on terms of the transaction could be reached as soon as Monday, according to Bloomberg.
Concerns over how Musk would fund the deal aside his "undervaluation" of the company were what led Twitter to initially balk at a deal with the billionaire entrepreneur. Just on April 19, The New York Post reported that Musk was considering investing up to $15 billion of his own money and pooling the rest externally to fund the buyout.
Saudi Prince Alwaleed bin Talal, one of Twitter's substantial shareholders, had described Musk's offer of $54.20 versus this year's high of $54.57 hit on April 5 as basically devoid of a premium. The Twitter board subsequently adopted a shareholder rights plan or so-called Poison Pill to reduce the likelihood that any person, entity or group would be able to gain full control over the company without paying a premium.
Analysts had also cited other concerns about Musk's style of management should he become the boss of Twitter. While he could revolutionize Twitter as a free-speech model, Musk could also use his influence on the platform to silence criticism against decisions he makes in his other businesses, they said.
Estimated by Forbes to be worth $270 billion, making him the world richest man, Musk is also chief executive of electric car company Tesla, a keen space travel explorer and cryptocurrency advocate, among other things. On top of these, the outspoken, flamboyant and eccentric entrepreneur calls himself a "free speech absolutist."
One of Twitter's most-prolific users, Musk's main concern with the microblogging site appeared to be over its moderation policies. In March, he tweeted out a poll that asked Twitter users whether the site, which has banned former president Donald Trump, among others, adhered to the principle of free speech.
