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Hat on head unpacking1/5/2024 Most analysts assume Musk would have to take out a loan against his Tesla stock, which accounts for the bulk of his wealth, but some are skeptical he would be able to convince a bank to cooperate. There are drawbacks for Musk: making an offer directly to shareholders would require him to explain how he plans to finance his purchase, which the maverick billionaire has not done so far. While the board of directors has a duty to act in the best interest of Twitter's investors, Musk has argued that "their economic interests are simply not aligned with shareholders." He was replying to a tweet noting that directors other than former CEO Jack Dorsey (who is leaving the board in May) own very little Twitter stock. Musk has tweeted several times recently saying that the company's investors should get to make the final decision about a sale. If Musk's offer is attractive enough, however, shareholders could pressure the board to scrap the poison pill. Some observers took that as a hint that he may try to appeal directly to Twitter shareholders with what's known as a tender offer, naming a price at which he'd buy their shares.īut that is exactly the sort of hostile move that the poison pill is designed to discourage. On Saturday, Musk tweeted "Love Me Tender" – the name of an Elvis Presley song. Twitter has hired Goldman Sachs and JPMorgan Chase as advisors, and analysts say the company and its bankers are likely already evaluating other potential suitors. The board could also try to find an alternative buyer – often referred to as a "white knight" – or even open up a formal public sale process. It's a defensive move, and it gives the board more time to consider Musk's offer. If that threshold were crossed, the board could inundate the market with discounted shares that Musk wouldn't be able to purchase, diluting his stake. The measure would make it more expensive for Musk or anyone else to increase their stake in the company to 15% or more. On Friday, the board put in place a "poison pill" – formally known as a shareholder rights plan – to fend off Musk, who currently owns about 9% of Twitter shares. Twitter's board of directors is expected to formally accept or reject Musk's unsolicited purchase offer soon. Twitter's board has a poison pill, but will a white knight emerge? ![]() ![]() Here's a rundown of where things stand and what could happen next. So will the billionaire's bid succeed, or will he back down? And what important factors are still in flux? ![]() The drama over Musk's $43 billion takeover bid for Twitter is heating up, not just because the company's board is resisting him, but because other players are starting to appear on the scene. He relishes moving markets with his tweets as much as he loves sharing duck memes with his more than 82 million Twitter followers. Smooth and orderly are not exactly what the world has come to expect from mercurial billionaire Elon Musk. Watching the richest person on the planet try to take over one of the most influential social networks is a head-spinning experience. Tesla CEO Elon Musk speaks at the Tesla Giga Texas manufacturing "Cyber Rodeo" grand opening party in Austin, Texas, on April 7, 2022.
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