To The Moon

Musk has become twitter's largest shareholder with a 9.2% stake in the company, the company announced on April 4.

On this Monday, Twitter CEO Parag Agrawal took the lead in stating that Musk refused to join the board. After that, Musk submitted documents to the US SEC, reaffirming that he did not intend to join Twitter's board of directors.

Seemingly calm, in fact, the tide is turbulent. Because according to the original agreement, Musk will officially become a member of Twitter’s board of directors on April 9, with a term of office until 2024. At the same time, Musk also promised that during his tenure as a director, he will not increase Twitter’s shares by more than 14.9%.

There was speculation at the time that Musk suddenly changed his attitude and refused to join the board of directors. It is likely that he was very dissatisfied with the current management, and the two sides did not reach an agreement, so he moved to continue to acquire Twitter shares.

On the document updated on April 11 (Monday), there is also a sentence: "The Reporting Person reserves the right to change his plans at any time,as he deems appropriate..."Sure enough, three days later, Musk threw a blockbuster to acquire 100% of Twitter.

Musk's "Letter"

On April 14, in the 13D file, there was a letter from Musk to Bret Taylor, the current chairman of Twitter, not even saying hello.In the letter, Musk first attacked the company, arguing that as a social media, it cannot meet the needs of "freedom of speech" and see no hope of future prosperity. Then came up with its own acquisition plan:

As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, 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. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder

In response, the board of directors said on Thursday that we have received an "unsolicited, unbinding proposal" from Musk and that we will deal with this matter exclusively.

Anti-musk action

Musk thinks he's "revolutionizing Twitter," though apparently the Twitter board doesn't think so.

Twitter's major shareholder, Saudi Prince Alwaleed bin Talal, took the lead in rejecting Musk's offer, saying Musk undervalued Twitter.

In order to resist Musk's hostile takeover and limit Musk's shareholding, Twitter's board of directors is also considering a “Poison Pill”. The specific operation is through an equity dilution clause. Once the malicious party acquires a certain percentage of shares, the original shareholders of the company can obtain a large number of shares of the company at a lower price, thereby raising the acquisition cost.

Back then, Sohu successfully repelled the hostile takeover by Beida Jade Bird through poison pill defense. With a market value of US$48.671 million, the acquisition cost of Beidaqing was as high as US$2.7812 billion.

As one of the largest asset management companies in the world, Vanguard has chosen a more direct method-spending money directly to increase its stake in Twitter, which is 1.1% higher than Musk's 9.2% stake, putting the horse Skek kicked off his position as the largest shareholder.

Undecided

Mr. Buffett, whom Mr. Musk once derided as a "kind grandpa," gave Mr. Musk a rare compliment in a new interview on Thursday：

That shows what America produces. I mean, Elon, didn't--he's taking on General Motors, Ford, Toyota, all these people who've got all the stuff, and he's got an idea. And he's winning. That's America. You can't dream it up. It's astounding.

But for this acquisition, after being rejected by the board of directors, there may be only two options left for Musk, either to continue fighting with the board of directors as a shareholder, or to sell the shares decisively and leave (high probability).

Therefore, some analysts believe that if Musk decides to give up the offer or reduce his stake, Twitter will face huge downside risks, so it is time to sell the stock.

But Dan Ives, an analyst at investment bank Wedbush Securities, believes that since other bidders are unlikely, the final outcome may be Musk's successful acquisition of Twitter.

However, Musk himself is relatively stable. At the TED conference, he said that from a technical point of view, he can afford Twitter (not bad money), and if Twitter rejects his proposal, he also has a backup plan.

(What is the backup plan, you ask? Can that tell you?)

So,

• What do you think of Musk's battle with Twitter's board? What will happen next?
• Do you support Twitter being bought by Musk?
• ......

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