Technology

Musk secures funding to purchase Twitter, considers making 'tender offer'

The tech billionaire revealed he had secured $46.5 billion in funding just days after Twitter's board blocked him from increasing his 9.2% shareholding without its approval

By Johannes Schmidt

April 21, 2022 3:20pm

Updated: April 22, 2022 11:43am

Elon Musk revealed on Thursday that he has secured $46.5 billion in funding to purchase Twitter, just days after the social media company’s board blocked the tech billionaire and Tesla CEO from increasing his 9.2% shareholding without its approval.

Musk outlined his funding commitments in a filing on Thursday with the Securities and Exchange Commission, the U.S.’ financial watchdog. Previously, he stated that his move to buy Twitter is meant to protect free speech and has suggested that he would push to unlock the platform’s potential with features like an edit button and an open-source algorithm, Yahoo Finance reported.

According to the document, the world’s richest man is currently “exploring whether to commence a tender offer” for the shares in Twitter he does not hold” and has committed an additional $33.5 billion of his own funds to finance the transaction.

Within the context of this purchase, a tender offer is considered a hostile bid because it bypasses the company’s board, which would normally be expected to recommend an offer to shareholders within the context of a conventional takeover, the Wall Street Journal reported.

The board, however, has moved to block Musk from increasing his 9.2% ownership in the company without its express approval. Although the company hasn’t directly addressed the tech giant’s $43 billion offer, it recently approved a temporary “poison pill” measure intended to prevent a hostile takeover. The plan, in essence, would allow a limited number of shareholders to buy more stock if anyone buys more than 15% of the company’s stock without the board’s approval – a move which would effectively dilute the value of Musk’s stake.

A spokesperson for Twitter acknowledged receipt of Musk's proposal.

"As previously announced and communicated to Mr. Musk directly, the board is committed to conducting a careful, comprehensive and deliberate review to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders," the Twitter representative said in a statement.

But even some of Musk’s harshest critics have praised the move, even suggesting that the investment is a win for free speech around the world.

Responding to a Boston Herald editorial about the Twitter saga, "Big Short" investor Michael Burry took to Twitter to praise Musk, saying “Of course @ElonMusk buying enough shares to control Twitter would be good for America. Period.”