Morgan Stanley and others fund Elon Musk in $46.5 billion Twitter takeover bid

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Cal Jeffrey

Posts: 3,491   +1,040
Staff member
What just happened? On Wednesday, Elon Musk filed paperwork with the Securities And Exchange Commission (SEC) stating that he has received funding to buy all of Twitter's outstanding stock, which as of February 10, 2022, was 800,641,166 shares. Musk's Schedule 13D amendment states that he has raised $46.5 billion in funding, more than enough for the entire purchase.

Last week, Twitter ignored Musk's bid to buy the company outright for $41 billion — it's worth less than $36 billion. Instead the board of directors initiated a poison pill strategy to prevent him from executing a hostile takeover. The plan calls for Twitter to offer more stock to its shareholders if Musk acquires a 15-percent stake in the company, thus diluting shares and making a takeover much more expensive.

Musk's counter to the poison pill is to drive straight through to a tender offer. Usually, when a stakeholder gains 15-percent active interest in a firm, it can attempt a hostile takeover by paying other shareholders a premium price for voting shares (a tender offer). Twitter's poison pill was meant to prevent Musk from doing this, but the board underestimated his ability or commitment to take the company forcefully.

Seeing Twitter's poison pill in place, Musk decided to skip trying to pick up the 5.8 percent he needed to get to 15 percent and went straight for the tender offer. His filing with the SEC indicates that he has received commitment letters from Morgan Stanley and "other financial institutions" showing he has $46.5 billion in funding. Presumably, Musk would use the money to make a tender offer directly to shareholders.

Keep in mind that this is just an amendment to Musk's 13D (originally a 13G, non-active) filing. It does not commit to any purchase or a tender offer. It just lets the SEC know that he does have the money to pay for such a transaction if the opportunity arises.

Under the current 13D amendment, Musk proposes to pay $54.20 per share of outstanding stock. Twitter is currently trading at $46.85 per share after a slight upward spike this morning when news of the filing broke. Ignoring the fact that the price will eventually normalize, that's 17 percent profit to any shareholder taking the offer.

Although his bid is for all outstanding stock, Musk does not need it all to takeover. All he needs is enough voting shares to give him control of the board. With the ability to win any board vote, Musk could do anything he wanted as long as it was in the best interest of the shareholders, including firing existing management and replacing it with his own.

Musk indicated in a tweet that his offer is meant to take Twitter private (among other things), but that's not likely to happen for $46.5 billion. He needs 51 percent of the stock to take Twitter off the market. It's very unclear whether enough shareholders support that decision, especially when it means giving up their investment in the company. However, it could turn into a long-term goal if he gains control.

In the meantime, it will be interesting to see precisely where this goes. Can Twitter execute its poison pill now rather than waiting for Musk to gain 15 percent? If Musk does make a tender offer, how many shareholders will sell out? If enough do, we could see some pretty dramatic changes in how the company operates.

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terzaerian

Posts: 1,262   +1,748
I wonder why they are trying to keep him from buying Twitter...weird.
Easy, they just got rid of Jack, and thus any lingering pretense that the platform would be used for anything besides the global establishment's propaganda and data mining. Elon is, if nothing else, a wild card, and the powers that be have had enough of rabble-rousing billionaires upsetting their apple carts.
 

Tantor

Posts: 314   +577
Go Elon!

Next up, Meta (Facebook), they are worse scum than Twatter pushing the globalist agenda and shutting down legitimate free speech regularly.

Yes. If Musk's Twitter takeover is financially successful, there would be nothing stopping him from going for Facebook next. The keys is the financial part. Divide and conquer.
 

maxxcool7421

Posts: 127   +202
All the sad third-right deep red trump fans are going to be sooo soooooo sad when they realize he using them only to make more money off of them and gives -0- cares about 'free speech' ...

The only thing he cars about is using twitter to garner more product sales for his private ISP that only he will control.. to a media platform that only he will control, delivered to a car company display that only he will control. its marketing gold, and they are the crop to be fleeced while he controls all you see .. like in nazi-russia
 

maxxcool7421

Posts: 127   +202
Easy, they just got rid of Jack, and thus any lingering pretense that the platform would be used for anything besides the global establishment's propaganda and data mining. Elon is, if nothing else, a wild card, and the powers that be have had enough of rabble-rousing billionaires upsetting their apple carts.

Snort, he only cares about the ''product'' to be farmed, and feed his global marxist views to said ''product'' .. and the product is the people enslaved by twitter and ***** tik-toks...
 
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scavengerspc

Posts: 2,574   +2,799
TechSpot Elite
Did 80+ millions followed him Truth Social?
you mean musk's version of free speech, bought to you by private satellites, on a platform only he controls... sure sounds like freedom ... or north korea.

I can see an advantage here politically.

Think of all the trumpanistas right here at TS. If trump and his ring kissers get back on twits, the world will see them clearly again. The things they say, their lies and anti-American ideals. And everyone will again see the trump right for what we already know they are. It will just be easier to find and out in the open.

I swear it will be like opening a worldwide comedy club.

iu
 
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emmzo

Posts: 609   +765
This type of "saviors" (Trump, Musk) are not there to upset other rich people, unless they have something to gain. They don`t care about left or right, freedom of speech or whatever, as long as they make more money. Btw, Trump was a democrat for more than 8 years, but, somehow, he is the embodiment of GOP. If you think these guys resonate with the common person, you must be really dumb. I`ll say this again, if you don`t like Twitter policies, just don`t fckin use it anymore, is that simple. When they`ll lose a lot of subscribers, they`ll change.
 

scavengerspc

Posts: 2,574   +2,799
TechSpot Elite
Trump was a democrat for more than 8 years, but, somehow, he is the embodiment of GOP.
Because he knew just what words to use to make the right swoon.

iu


He didnt have to build a wall. All he had to do was promise he would and then build 4 miles of it.
.
And took over the Republicans so easily, it almost seems surreal.
 
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