Elon Musk has Twitter’s embattled board and management team by the, well, you know what.
The Tesla CEO, who has a 9.2% stake in Twitter, offered to buy the social media platform for $54.20 a share. Twitter confirmed in a press release that it received Musk’s offer and said the board of directors “will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders.”
The bottom line is Twitter’s board has three choices.
First, the board — led by new Salesforce co-CEO Bret Taylor — could either accept Musk’s very fair bid and drive certainty of value for shareholders after many long years of suffering and letdown.
Choice two, it could rebuff Musk and watch as he dumps his entire stake in the company. In turn, that would likely put material downward pressure on Twitter’s stock price given the public concerns Musk has expressed on Twitter’s business.
“I believe for the board, Musk is their worst nightmare. They accept the bid or go around the globe looking for another one,” said Wedbush analyst Dan Ives on Yahoo Finance Live. “Musk is not going away.”
Twitter shares had surged 13% in pre-market trading. But the stock fell slightly in the early afternoon on fears Twitter would rebuff Musk’s offer, he would dump his stake and send the share price reeling.
And as the share price probably goes into free fall, Twitter could be slapped with lawsuits from shareholders who are unhappy with the board’s decision.
As Ives added, it’s time to “break out the popcorn.”
