Investors are baffled by Elon Musk’s cryptic tweet channelling Elvis, Editorials99
Elon Musk, the billionaire entrepreneur, kept investors in the dark this weekend with a cryptic tweet containing the word “tender,” a likely wink-and-nod reference to a potential tender offer to Twitter Inc. shareholders for control of the company.
The world’s richest person caused a stir last week after he filed a $43 billion proposal offering $54.20 a share for the social network, which led Twitter to adopt a so-called poison-pill provision on Friday to make it harder for Musk or a group of investors to acquire more shares.
If Twitter’s board of directors eventually rejects him, the world will know whether Musk was truly threatening a direct appeal to shareholders or had simply added the 1956 Elvis Presley hit “Love Me Tender” to his playlist.
Musk may try to form a partnership with investors such as Oracle Corp., whose co-founder Larry Ellison sits on Tesla Inc.’s board, as well as a group of private equity firms including Thoma Bravo, Bloomberg Intelligence analysts Mandeep Singh and Ashley Kim wrote Friday. According to them, the partnership could raise the bid to $50 billion.
Musk stated over the weekend that the economic interests of Twitter’s board are not aligned with those of shareholders. He was responding to a tweet about board members’ stock holdings, claiming that since Twitter founder Jack Dorsey’s departure, the board “collectively owns almost no shares.” He had previously tweeted that the board could face legal consequences if it acted against shareholders.
Wall Street banks are taking sides in the battle for Twitter. Twitter has retained Goldman Sachs Group Inc. and JPMorgan Chase & Co., the latter of which has previously clashed with Musk over the valuation of hundreds of millions of dollars in Tesla stock warrants. Musk is being advised by Morgan Stanley.
Twitter shares have risen about 15% since Musk disclosed a 9.2 percent stake in the company on April 4, but are still well below Musk’s offer price of $45.08 as of April 14, reflecting doubts that a deal will be completed. Tesla’s stock has fallen 9.2 percent in the same time period, as investors fret about the possibility of its CEO becoming distracted by another public company or a passion project. The electric-vehicle manufacturer is also under pressure in China, where its massive Shanghai automobile plant has been closed for weeks due to the region’s Covid-19 lockdowns.
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