Elon Musk proposed to purchase Twitter for $42.00 billion in a filing published on Thursday. He said that the social media giant needs to be private to become a platform for free speech.
The offer came after he revealed a 9.10% stake in the company, making him the second-largest shareholder.
Musk made the bid in a securities letter sent to the board of the microblogging platform. He plans to acquire Twitter for $54.20 per share in cash, representing a 54.00% premium.
He further stated that his proposal was his final offer. If it is not accepted, he will reconsider his position in the company.
Later that day, he emphasized in a talk at TED2022 that he was not interested in acquiring Twitter to make money off it. He even stated that he was unsure if he could buy the company.
This latest news came after Twitter CEO Parag Agrawal warned investors of distractions ahead. Reports said that the firm told employees in a staff meeting that it would evaluate the offer.
In the previous years, Tesla’s CEO has criticized the social networking titan.
Last month, he created a poll on the platform, questioning whether the company abides by the free speech principles. Musk also said that he considers creating his own media platform.
Twitter shares closed 1.68% or 0.77 points lower to $45.08 per share on the announcement. Then, it eventually gained pace in the extended trading. The stock jumped 3.50% or 1.58 points to $46.66 per share.
Meanwhile, Tesla suffered more as it dipped 3.66% or 37.37 points to $985.00 per share. It slightly rose 0.45% or 4.45 points to $989.45 per share in the after-hours market.
Musk’s Twitter play sparks distraction concerns
Furthermore, Elon Musk’s offer triggered concerns among Tesla investors and analysts. They worried that the electric carmaker could suffer as the chief executive became distracted by his takeover play.
They are also anxious that there would be possible sales of Tesla to fund the deal. Meanwhile, Musk said that he has the assets for the acquisitions but has not provided details.
Market participants said that Tesla’s CEO got many things going on, a likely headwind to the company’s stock.
The leading automaker currently faces its own challenges. Experts emphasized that the firm must boost production at new assembly plants in Berlin and Texas.
Subsequently, its Shanghai factory, its central export hub, halted operations due to the strict COVID-19 crackdown in China.