Shares surged 13% in premarket trading on Thursday after $41 billion buyout bid
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A US Securities and Exchange Commission (SEC) filing showed on Thursday a “non-binding proposal” from Elon Musk to Twitter. According to the filing, Musk proposed to buy all of the outstanding shares of the social media company he doesn’t already own for $54.20 each.
That represents an 18.2% premium on top of Wednesday’s closing price of $45.85. With 800.64 million shares outstanding as of February 10, Musk’s bid would value Twitter at roughly $47 billion.
In a letter to the board of directors, Musk said he believes social media platform “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company.”
The filing confirmed Musk’s previous disclosure of owning 73.12 million Twitter shares, or 9.1% of the shares outstanding. The billionaire first disclosed the stake on April 4, while under US laws he should have notified the SEC on March 24. One of Twitter’s investors launched a lawsuit this week, accusing Musk of having gained millions of dollars by “deflating” share prices through delayed disclosure.
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An active Twitter user with over 81.5 million followers, Musk became the social network’s largest shareholder after disclosing the purchase. Musk is currently worth about $260 billion, according to Bloomberg’s Billionaires Index. To compare, Twitter’s market valuation stands at about $37 billion.
Twitter shares surged 13% on the news in pre-market trading.
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