Shares of Twitter, arguably the worlds most influential social media platform, jumped after the Wall Street Journal reported that the company is nearing a deal with Elon Musk, the worlds richest man, and that the announcement could come as soon as Monday night.
Earlier this month, Musk offered to buy Twitter for $54.20 a share, or about $43 billion. Twitter’s board of directors met on Sunday to discuss Musk’s financing plan.
The board negotiated with Musk into the early hours of Monday, The New York Times said.
Twitter shares fired up nearly 6 per cent in the afternoon, chiefly because of media speculation that the deal was expected after market close, if not sooner.
So far, the social media giant was expected to decline a deal, which includes Musk’s plan to take it off the stock market.
So far, Twitter had adopted a so-called poison pill to fend off a potential hostile takeover. However, the company betrayed greater receptivity after Musk revealed he secured $46.5 billion in financing.
The company’s board met on Sunday to discuss Musk’s financing plan for his proposed bid, a source told CNBC.
Bloomberg and Reuters reported that the two sides could reach an agreement as soon as Monday.
It’s unclear what a final deal could look like. As if to hedge its bets somewhat, Reuters also said that an agreement could still fall apart.
Twitter has not been able to secure a “go-shop” agreement yet, which would allow it to look for other bids once it signs an accord. The company could still accept another bid if Musk pays a break-up fee, Reuters said.
Wall Street was likely to view the news of Twitter’s openness to a bid “as the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix”, said a note by Wedbush analyst Dan Ives.
“I think they almost have to take the deal,” CNBC’s Jim Cramer said.
Twitter is set to report first-quarter earnings on Thursday.
“Locking a deal up today or tomorrow may sound pretty appealing for someone who knows they are in possession of bad news,” a note by Gordon Haskett said.
Musk, who owns Tesla and SpaceX, built up more than 9 per cent in Twitter stock and turned down an offer to join the board before putting in a bid.
An avid Twitter user, Musk claims it needs to be “transformed” into a private company so it can become a forum for free speech.
He has also said that Twitter’s board members’ interests “are simply not aligned with shareholders” and that the board “owns almost no shares” of the company.
Consequent disarray is palpable. While welcoming Musk till the foray was limited to a single digit control of Twitter stock, CEO Parag Agarwal has gone off his own platform since the last 18 days.
On his part, co-founder (and former CEO) Jack Dorsey, whose Twitter bio states that he is a “romantic moron and 1/8 hippie”, is no longer the CEO of Block (his not-so-famous venture once called Square) either.
“Titles like ‘CEO’ get in the way of doing the right thing. Respect to the people who ignore titles, and fight like hell for what is right,” Dorsey had once tweeted.
In a filing with the Securities and Exchange Commission on Friday, Block said Dorsey has changed his title to ‘Block Head’.
Block updated its bylaws to reflect Dorsey’s new role, removing the requirement to have an officer holding the titles of CEO and President.
Dorsey and Musk have sparred in multiple theatres. Titles is one of them.
In its filing some months back, Tesla had said Musk would henceforth be known as “Technoking” and Tesla CFO Zach Kirkhorn would be referred to as “Master of Coin”.
(Nikhila Natarajan tracks Big Tech and tweets @byniknat)