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Speculation mounts that Musk IS planning hostile take-over of Twitter after he filed amended SEC paperwork indicating he will criticize the firm and demand change
- Elon Musk, 50, last week was revealed to be the biggest shareholder in Twitter, having bought a stake worth 9.2 percent – four times that of founder Jack Dorsey
- Musk was due to join the board of the company on Saturday but decided not to, CEO Parag Agrawal said on Sunday
- Agrawal said he thought Musk’s decision was ‘for the best’ and said the company must remain focused on its corporate goals
- He did not say why Musk would not join, but suggested that shareholders had expressed concern
- On Monday, Wall Street analysts alleged Musk declining board membership could lead to a hostile takeover of the company
- ‘I don’t think anything is off the menu with this guy,’ one said
- ‘This is clearly going to be an unfriendly situation,’ added another
Elon Musk has raised speculation that he may he launch a hostile take-over bid of Twitter after he filed paperwork with the Securities and Exchange Commission (SEC) indicating he will keep criticizing the platform and demanding change.
Musk, who is the company’s largest shareholder, signed the new filing Monday indicating he may ‘express his views’ about Twitter’s policies and services to the board or on social media.
The form also said Musk ‘may engage in discussions with the Board and/or members … potential business combinations and strategic alternatives, the business, operations, capital structure, governance, management, strategy of the Issuer and other matters concerning the Issuer.
‘The Reporting Person may express his views to the Board and/or members of the Issuer’s management team and/or the public through social media or other channels with respect to the Issuer’s business, products and service offerings,’ the filing added.
Musk had originally filed SEC form 13G, indicating he planned to be a passive investor – but soon amended the filing to a 13D form commonly associated with ‘activist investors’ who want to signal their intentions to create change or even take over a company entirely.
Monday’s amendment has analysts concerned Musk could be seeking to stage a hostile takeover at Twitter, which would require him to own at least 50 percent of the company’s stock.
Notably, this week’s filing indicates that Musk ‘has no present plans or intentions’ to stage such a takeover – though it also states that he ‘reserves the right to change his plans at any time.’
‘This weekend’s changeup spares the company from having to deal with a renegade director tweeting about board-level discussions. That would have been untenable,’ Don Bilson, of Gordon Haskett Research Advisors, told CNBC Monday.
‘The flip side to this is Twitter must deal with a wildcard investor that already owns 9 percent of the company and has the resources to buy the remaining 91 percent. As volatile as Musk is, we could see a move like that made shortly. Or we could never see it all,’ he added. ‘I don’t think anything is off the menu with this guy.’
‘This is clearly going to be an unfriendly situation,’ Wedbush Securities analyst Dan Ives echoed. ‘Instead of Musk in the board room in the corner just saying nay or agreeing on certain board candidates, I think now it really goes to the point that in the coming days I think we’ll start to see if he’s going to go more hostile, more active – that’s what the Street’s focused on.’
Other analysts allege Musk’s promise to be vocal about the company could impact the value of Twitter stock, which recovered quickly after falling more than 8 percent in premarket trading Monday, after news emerged that Musk was refusing to take a seat on the company’s board of directors.
The social media giant’s share price was up more than 1% as of midday Monday, to $46.77 after closing at $46.23 Friday.
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