Barely a week goes by without Elon Musk getting in the headlines. The Tesla and SpaceX founder’s latest stunt? Not content with just having one of the most followed Twitter accounts on the planet, the notoriously libertarian (and libertine) billionaire has launched a $43 billion hostile takeover of the social media platform.
Musk, who is already the largest single investor in Twitter Inc. (owning over 9% of the company’s shares), has offered to take Twitter private, lambasting company management and saying only he can unlock the “extraordinary potential” of the platform, Bloomberg Business reports.
Musk’s offer is that he’ll pay $54.20 per share in cash, which is 38% above the price on April 1st, the last trading day before Musk went public with his stake. Previously, Musk had agreed to a deal that’d see him join Twitter’s board of directors and prohibit him from acquiring more than 14.9% of the company – but he decided not to join the board before his appointment became effective on April 9th. Seems he’d rather own Twitter outright.
It’s a characteristically bold move from Musk, who’s long criticized Twitter for its seeming lack of commitment to free speech and has long used the platform to share updates on his business ventures, dabble in drama and share memes. Twitter isn’t keen on his takeover bid, and is already preparing a ‘poison pill’ to prevent it, The New York Times explains.
Though it might be better for free speech on the platform, we’re not so sure we’d want ‘The Doggefather’ running Twitter. But what we do know is this: it’s all very entertaining, and it seems that Elon Musk has made corporate raiding cool again.
Elon Musk explains why he wants to buy Twitter during a recent a TED Talk in Vancouver.
What’s corporate raiding, exactly? A corporate raid describes a particular type of hostile takeover where a business or individual (a ‘corporate raider’) purchases a large stake in another business and then uses shareholder voting rights to force it to undertake novel measures – usually to increase the share value, and usually in opposition to the desires and practices of current management.
Corporate raiding was big in the 1980s, with figures like Carl Ichan, T. Boone Pickens and Paul Bilzerian (yep, Dan Bilzerian’s dad) becoming notorious for the practice. Michael Douglas’ iconic character Gordon Gekko from the 1987 film Wall Street – with his famous “greed is good” line – personifies the unscrupulous corporate raider, and still looms large in the public consciousness.
But as much as aspiring Wall Street bros idolise Gekko (just like they idolise Leonardo DiCaprio’s depiction of Jordan Belfort in The Wolf of Wall Street), he’s a villain. Corporate raiders have always been seen as villas. But Elon Musk might change that perception.
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Regardless of what you think about him, it’s hard to deny that Musk has been for huge perception shifts around electric vehicles as well as spaceflight. By framing his corporate raiding attempt as a defense of free speech and a way to further some sort of technocratic, utopian democracy, could Musk make corporate raiding socially acceptable?
Indeed, could Musk influence other activist investors to follow his lead and launch takeovers of other influence tech businesses, like Google, Facebook or Uber?
That said, it’s not clear whether Musk’s Twitter ploy fits the definition of a corporate raid. He hasn’t announced any really concrete plans for what he’d do to Twitter if he bought the business, but from what he’s said so far, it seems he’d want to enact some pretty radical changes, which is certainly what corporate raiders typical do.
But unlike corporate raiders, he doesn’t seem motivated by pure profit – nor does he want to just liquidate Twitter or use it to boost Tesla or SpaceX’s bottom lines, for example. We doubt Musk would want to own Twitter indefinitely (that would seem to go against his anti-monopolistic and free speech stances), but it doesn’t look like he just wants to sell it on, either.
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Chances are this Twitter buyout won’t happen. Twitter’s so against it, and Musk’s notoriously fickle – he’s likely to get distracted and pursue something else. Indeed, Tesla’s stock price has been trending downwards since Musk went public with these plans for Twitter, with investors clearly seeing Musk’s distraction with Twitter as negative for his other ventures.
Ah well. We’d rather Musk own Twitter than Donald Trump…
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