Tesla CEO Elon Musk has finally announced his foray into the media industry, and this time he will acquire social media Twitter wholly.
On Thursday, Twitter said it had received an offer from the world's richest man and would scrutinize the offer.
According to SEC filings, Musk offered to buy all of the remaining Twitter shares for $54.20 per share in cash, after disclosing that he owns more than 9 percent of Twitter.
The $43 billion offer for Musk's acquisition represents a 38% premium to the closing price on April 1 and an 18% premium to Wednesday's closing price.
According to Musk's proposal, after the acquisition of Twitter plans to take it private, he believes that Twitter needs a "transformation."
Shares of Twitter rose as much as 13% on Thursday before closing down.
Tesla shares fell 3.66% at the close.
Musk said the latest offer was his "best and final offer," adding that if Twitter didn't accept it, he would have to reconsider whether to give up his other 9 percent.
Musk revealed last week that he had been buying Twitter shares since the end of January, spending $2.6 billion to add 73.1 million shares, or more than 9 percent, according to the company's disclosures at the time.
Musk wrote in a letter to Twitter: "Since I made the investment, I have realized that the company will neither thrive nor serve society well in its current form unless transformed into a private company. "
According to Twitter's 2021 full-year financial report released in February this year, revenue was $5.08 billion, a year-on-year increase of 37%, and the net loss still reached $221 million, although it was significantly narrower than the loss of $1.14 billion in 2020.
In addition, Twitter's total advertising interactions in the fourth quarter of last year fell by 12% year-on-year, because it was difficult to attract users to click, which may be affected by the platform's protection of personal information privacy.
Musk believes that taking companies private could reduce regulatory oversight of their operations.
At one point, he tweeted about taking Tesla private, for which he was punished by regulators.
He proposed taking Tesla private at $420 a share at the time.
This time, Musk's offer of $54.20 per share to Twitter also included the three figures of "420".
Regarding Musk's takeover proposal, the market has two main views. One is that the takeover is a completely unilateral "hostile takeover" and threatens to withdraw from the shareholder's status; the other is that Musk's offer is high enough and very high. Hardly any bidder will show up.
Dan Ives, a technical analyst at brokerage Wedbush Securities, said it would be difficult for Twitter to reject Musk's offer.
"Twitter's board is going to be fighting back," Ives said. "It's hard to see other bidders at this premium."
Twitter is Musk's most active "front" for his remarks.
Musk has 81.6 million followers on Twitter, far more than any other CEO.
Last month, he said on Twitter that he was seriously considering creating a new social media platform.
But for now, the acquisition is still full of uncertainty.
The first is that Musk has many more questions to answer about how Twitter will develop in the future, including how to allay the concerns of Twitter employees, some of whom are reluctant to have anything to do with the often-controversial manager.
Musk, who declined to serve on Twitter's board before launching the Twitter acquisition, did not elaborate on how changes would be made to the social media company.
According to documents from the offer, Musk will use cash to buy Twitter and has hired Wall Street giant Morgan Stanley as financial adviser for the deal, but he did not disclose where he raised the funds.
Although Musk is the richest person in the world, most of his $274 billion in net worth is tied to his publicly traded shares of Tesla and privately held SpaceX.
His Tesla stock is worth about $177 billion.
There has been speculation that Musk may not need to sell Tesla shares, but could use them as collateral to borrow money to buy Twitter.
And even if he sells the required amount of Tesla stock to buy Twitter, Musk still owns a controlling stake in Tesla.
On the other hand, how Musk divides his energy among the several companies he owns also determines the future development of the company.
His interest in Twitter, for example, could be a distraction from the time he spends at the Tesla factory.
It's unclear if Musk will also try to be CEO of Twitter, but the company has been lacking strong leadership since co-founder Jack Dorsey abruptly resigned last year.
Musk's acquisition of Twitter also reflects the tech billionaire's desire to own the media.
Jeff Bezos, the world's second-richest tech billionaire and founder of Amazon, is a major shareholder in The Washington Post.
He bought the then-declining newspaper for $250 million in 2013 and carried out massive reforms to turn losses into profits through a fee-based model.
It’s worth noting that Bezos’ personal investment platform, Bezos Expeditions, is also an investor in Twitter.