Watching the richest person on the planet try to take over one of the most influential social networks is a head-spinning experience.
Smooth and orderly are not exactly what the world has come to expect from mercurial billionaire Elon Musk. He relishes moving markets with his tweets as much as he loves sharing duck memes with his more than 82 million Twitter followers.
The drama over Musk's $43 billion takeover bid for Twitter is heating up, not just because the company's board is resisting him, but because other players are starting to appear on the scene.
So will the billionaire's bid succeed, or will he back down? And what important factors are still in flux?
Here's a rundown of where things stand and what could happen next.
Twitter's board has a poison pill, but will a white knight emerge?
Twitter's board of directors is expected to formally accept or reject Musk's unsolicited purchase offer soon.
On Friday, the board put in place a "poison pill" – formally known as a shareholder rights plan – to fend off Musk, who currently owns about 9% of Twitter shares. The measure would make it more expensive for Musk or anyone else to increase their stake in the company to 15% or more.
If that threshold were crossed, the board could inundate the market with discounted shares that Musk wouldn't be able to purchase, diluting his stake. It's a defensive move, and it gives the board more time to consider Musk's offer.
The board could also try to find an alternative buyer – often referred to as a "white knight" – or even open up a formal public sale process. Twitter has hired Goldman Sachs and JPMorgan Chase as advisors, and analysts say the company and its bankers are likely already evaluating other potential suitors.
What does it mean to "Love Me Tender"?
On Saturday, Musk tweeted "Love Me Tender" – the name of an Elvis Presley song. Some observers took that as a hint that he may try to appeal directly to Twitter shareholders with what's known as a tender offer, naming a price at which he'd buy their shares.
But that is exactly the sort of hostile move that the poison pill is designed to discourage. If Musk's offer is attractive enough, however, shareholders could pressure the board to scrap the poison pill.
Musk has tweeted several times recently saying that the company's investors should get to make the final decision about a sale.
While the board of directors has a duty to act in the best interest of Twitter's investors, Musk has argued that "their economic interests are simply not aligned with shareholders." He was replying to a tweet noting that directors other than former CEO Jack Dorsey (who is leaving the board in May) own very little Twitter stock.
Can Musk really pay for Twitter?
There are drawbacks for Musk: making an offer directly to shareholders would require him to explain how he plans to finance his purchase, which the maverick billionaire has not done so far.
Most analysts assume Musk would have to take out a loan against his Tesla stock, which accounts for the bulk of his wealth, but some are skeptical he would be able to convince a bank to cooperate. Financing a deal north of $40 billion tied to a stock with a history of volatility carries a lot of risk.
Twitter shares rose 7.5% to $48.45 on Monday, but are still trading below Musk's offer price of $54.20 a share, suggesting investors remain skeptical about his chances of success.
Will other buyers emerge from the wings or give Musk the money he needs?
Companies from Disney to Salesforce have considered buying Twitter over the years, though none of those deals materialized. But now, Musk's offer has put Twitter in play once again.
"This is a moment in time which may not be replicable in the future," said Scott Kessler, analyst at research firm Third Bridge. "One thing [Musk] has unquestionably done is to start conversations about the future of the company – whether in fact Twitter will remain a publicly traded company or will it be acquired."
The private equity firm Thoma Bravo, which owns software companies including antivirus provider McAfee, is working on a potential bid for Twitter, the New York Post reported last week.
Musk himself could also team up with other investors to bolster his bid. One possibility that observers are buzzing about: the private equity firm Silver Lake, which worked with Musk on his failed attempt to take Tesla private in 2018. Silver Lake's co-CEO Egon Durban joined Twitter's board in 2020 as part of an agreement with another activist investor, Elliott Management, which has criticized Twitter's sluggish growth.
On Monday, the Wall Street Journal reported the buyout firm Apollo Global, which owns Yahoo, is weighing getting involved in the Twitter drama, by providing financing to Musk or another potential buyer.
Musk could always call it quits
In his communications with Twitter's board, Musk said $54.20 a share was his "best and final offer," which struck many Wall Street analysts as bizarre, since mergers and acquisitions typically follow a lengthy negotiation process.
If true to his word, however, Musk could withdraw his offer, and might even sell all of his shares in Twitter. In his letter to the chairman of Twitter's board, Bret Taylor, Musk hinted at that possibility, writing that if his purchase proposal is turned down, he "would need to reconsider my position as a shareholder."
Retreating from his 9% stake, which makes Musk Twitter's largest individual shareholder, could send the stock price plunging. Still, it would come as a relief to those who view Musk's aggressive come-on as a threat to the future of the company.
But that would leave Twitter where it started off: a company that has struggled to grow as quickly as some investors have demanded – and likely still vulnerable to activists. Despite its cachet among politicians, celebrities and journalists, Twitter's base of 217 million monthly active users is far smaller than Facebook's 2.9 billion, or even upstart TikTok's 1 billion users. Twitter has struggled to grow its advertising sales and consistently turn a profit.
As for Musk, if he sells he could make off with a nice pile of money. Twitter's stock price is up 32% since he first began buying shares on Jan. 31. At Monday's closing price, Musk's Twitter stake was worth $3.5 billion.
What about the SEC?
Musk has a well-documented history of thumbing his nose at the Securities and Exchange Commission, even saying in 2018 that he does not respect the financial regulatory agency.
After his now-infamous tweet that year claiming he had "funding secured" to take Tesla private, Musk and Tesla agreed to pay a $40 million fine to settle a securities fraud charge brought by the SEC. Musk also stepped down as Tesla's chairman.
Now all eyes turn to whether the SEC will act again.
Under a consent decree stemming from the 2018 tweet, Musk agreed not to make any untrue statements about the buying or selling of stocks and not to omit any relevant facts when publicly speaking about stock trading. Violating the agreement could trigger fines and other penalties.
So far, the SEC has not accused Musk of breaking any rules in connection with his Twitter takeover attempt, but regulators are likely examining the way he built up his stake.
Musk disclosed to the SEC that he had snapped up a sizable chunk of Twitter 11 days after the legal deadline for reporting the purchase. A shareholder lawsuit alleged his tardy filing resulted in $143 million in savings for Musk and millions lost for investors.
Experts say regulators could ding Musk over what is basically a technical paperwork mistake, but the SEC is more likely to probe all of Musk's statements and actions leading up to and during his attempt to buy Twitter.
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