Musk’s offer price of $54.20 per share, which was disclosed in a regulatory filing on Thursday, represents a 38% premium to Twitter’s April 1 close, the last trading day before the Tesla CEO’s more than 9% stake in the company was made public.
Twitter’s shares jumped 12% in premarket trading.
Here is a summary of analyst comments (in alphabetical order):
JESSE COHEN, SENIOR ANALYST AT INVESTING.COM
“Elon Musk’s offer shows that he has very little confidence in current management and does not believe he can drive the necessary change while Twitter is still public, particularly its free speech policies. Now we know the reason behind Musk’s refusal to join the board.”
“Given the likelihood that Twitter’s board will reject the offer, the question then becomes whether Musk would want to perform a hostile takeover of the company.”
MICHAEL HEWSON, CHIEF MARKET ANALYST AT CMC MARKETS
“The big question for the Twitter board now is whether to accept a very generous offer for a business that has been a serial underperformer and tends to treat its users with indifference.
“Twitter has also come under increasing criticism for its arbitrary censoring of accounts that don’t adopt a particular political narrative, as well as the arbitrary nature of how it verifies users, and deals with fake accounts, over genuine users.
“From customer service to the monetisation of its user base, Twitter has been a serial underperformer for some time. Maybe a shaking up of the status quo wouldn’t be a bad thing!
“Whatever your feelings on Musk, he would certainly shake things up, with the only question as to whether he would make things worse or improve them.”
BEN LAIDLER, GLOBAL MARKETS STRATEGIST AT ETORO
“Musk’s offer of $54.20 per share is a punchy 38% higher than when he disclosed his initial stake but is still 30% below the share price highs of last year. This opens a battle for control between new CEO Parag Agrawal, who is trying to engineer a company turnaround, and Musk’s view that Twitter will ‘neither thrive nor serve (its) societal imperative in its current form’.”
VICTORIA SCHOLAR, HEAD OF INVESTMENT AT INTERACTIVE INVESTOR
“This is a deeply hostile move from Elon Musk who has threatened to reconsider’ his 9.2% stake in the company if his 100% acquisition offer is rejected. Although Musk has said he’s not playing the back-and-forth game’ the question is whether he would up his offer if it is rejected, which is difficult to predict just like Musk himself.
“If he were to take control of the company there could be some significant changes with a shift in focus away from content moderation and healthy content sharing towards absolute free speech which Musk says is a social imperative’.
“The biggest change however would be that the company would go private, allowing more flexibility and requiring less accountability. Plus we would expect to see the changes Musk outlined over the weekend including allowing users to pay with dogecoin and cutting the price of the Twitter Blue premium service.
(Reporting by Samuel Indyk; Compiled by Saikat Chatterjee)