Elon Musk is no longer Twitter’s largest shareholder
Last week, the Tesla CEO proposed an offer to buy the microblogging site for $54.20 per share in cash. Elon Musk offers to buy Twitter for $43 billion, so it can be ‘transformed as private company’
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As you know last week Elon Musk started a bid of $43 billion to buy Twitter shares 100% saying the social media company needs to be transformed privately. On April 4, Elon Musk revealed that he owns 9.1% stake in the company.
In a new filing with the Securities and Exchange Commission, Musk laid out his plan for the $46.5 billion worth of loans that will allow him to finance the buyout offer made on April 14th.
Vanguard group now owns largest stake in Twitter
On April 4, Tesla CEO Elon Musk became Twitter’s largest stakeholder. But as of now, the Vanguard group has taken a 10.3% holding in Twitter becoming the largest shareholder. As of last December, Vanguard group owned around 70.4 million Twitter shares, accounting for 8.8% of all outstanding shares. Vanguard isn’t making a directional bet on Twitter. Instead, the majority of its assets are in indexes and other so-called passive funds.
The most recent publicly available filings with the US Securities and Exchange Commission (US SEC) reported that Vanguard now owns 82.4 million shares of Twitter or 10.3% of the firm.
According to Twitter stock’s closing price on Wednesday, Vanguard’s holdings are now worth $3.78 billion reported by The Wall Street Journal.
Elon Musk’s Twitter polls
On April 15, Elon Musk ran a poll on Twitter. “Taking Twitter private at $54.20 should be up to shareholders, not the board,” Musk polled users with a yes or no option.
Musk also tweeted a screenshot of a Goldman Sachs report from February 10, which showed a $30 price objective for the stock.
Musk also tweeted that “Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there.
Jack Dorsey opened on Elon Musk buying Twitter
Jack Dorsey stepped down as chief executive in November. Twitter’s chief technology officer Parad Agrawal now has now become the CEO.
Dorsey referred to the board as “consistently the dysfunction of the company”. Dorsey will remain as a board member till next month with his 2.2 percent share. When another Twitter user asked Musk if he was allowed to speak publicly on the matter, he clearly said “No”.
Dorsey also agreed with venture capitalist Gary Tan that a badly run board “can literally make a billion dollars in value disappear”. Elon Musk stated that “with Jack departing, the Twitter board collectively owns almost no shares!” and also said, “Objectively, their economic interests are simply not aligned with shareholders”.
Twitter's Board Views Musk's Offer As Unwelcome
After Musk announced proposal to buy Twitter, the company’s board has implemented a poison pill, as well as previous provisions in the company’s bylaws, that could make it extremely difficult for Musk to assume control.
A poison pill strategy gives existing shareholders the right to purchase additional stock at a significant discount, thus diluting the holdings of a new, hostile investor. It is officially known as a shareholder rights plan. Twitter’s poison will stay in place for a limited duration of one year.
Elon Musk Is not The First Who Tried To Buy Twitter
Companies from Disney to Salesforce.com have considered acquiring Twitter in the past but have backed off. Facebook’s Mark Zuckerberg tried to acquire Twitter not once but twice, through official channels and via co-founder Jack Dorsey in the past.
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