Musk’s takeover bid on Twitter: what the market thinks

People holding mobile phones are silhouetted against a background projected with the Twitter logo in this illustration picture taken on September 27, 2013. REUTERS/Kacper Pempel/Illustration/File Photo

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LONDON, April 14 (Reuters) – Billionaire Elon Musk has offered to buy Twitter (TWTR.N) for around $41 billion, just days after turning down a seat on the social media company’s board.

Musk’s offer price of $54.20 per share, which was disclosed in a regulatory filing Thursday, represents a 38% premium over Twitter’s close on April 1, the last trading day before the CEO of Tesla (TSLA.O) has a stake of more than 9% in the company. was made public. read more

Twitter shares rose 12% in premarket trading.

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Here is a summary of the analyst comments (in alphabetical order):

JESSE COHEN, SENIOR ANALYST, INVESTING.COM

“Elon Musk’s offer shows that he has very little confidence in current management and doesn’t believe he can drive the change needed while Twitter remains public, particularly its free speech policies. We now know the rationale behind Musk’s refusal to join the board.”

“Given the likelihood that Twitter’s board will reject the offer, the question is whether Musk would want to conduct a hostile takeover of the company.”

MICHAEL HEWSON, CHIEF MARKET ANALYST AT CMC MARKETS

“The big question for Twitter’s board now is whether to accept a very generous offer for a company that has serially underperformed and tends to treat its users with indifference.

“Twitter has also come under increasing criticism for its arbitrary censorship of accounts that don’t espouse a particular political narrative, as well as the arbitrary nature of how it verifies users and treats fake accounts over genuine users.

“From customer service to monetizing its user base, Twitter has been serially underperforming for some time. Maybe a shake up of the status quo wouldn’t be a bad thing!

“Whatever his feelings about Musk, he would certainly change things, with the only question being whether he would make things worse or better.”

BEN LAIDLER, GLOBAL MARKETS STRATEGIST AT ETORO

“Musk’s offer of $54.20 per share is 38% higher than when he disclosed his initial stake, but is still 30% below last year’s peak share prices. This opens up a battle for the check between new CEO Parag Agrawal, who is trying to engineer a company turnaround, and Musk’s view that Twitter will “neither thrive nor fulfill (its) social imperative in its current form.”

VICTORIA BECA, HEAD OF INVESTMENTS 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% takeover offer is rejected. Although Musk has said he is not playing the ‘game back and forth’, the question is whether he would raise 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 from content moderation and healthy content sharing to outright freedom of expression, which Musk says is a ‘social imperative.’ .

“However, the biggest change would be that the company would go private, allowing more flexibility and requiring less accountability. Additionally, we would expect to see the changes Musk outlined over the weekend, including allowing users to pay with dogecoin and reduce the price of Twitter Blue. premium service.”

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Information from Samuel Indyk; Compiled by Saikat Chatterjee

Our standards: the Thomson Reuters Trust Principles.

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