It is finally happening?!
In a rapid turnabout, Twitter’s board has accepted Elon Musk’s offer to take the social media company private at $44 billion and it is quite a surprise as the board was against it initially.
Musk has said that his main goal is not about economics and profits but to make Twitter a place for free speech. With that objective in mind, he came out with a financing package comprising of $25.5 billion of fully committed debt and margin loan financing with some of the top financial institutions like JP Morgan and Bank of America and is using about $21 billion of his own equity to finance that purchase.
The next steps would be the shareholder vote and obviously going head-on with regulatory bodies like the SEC. As we know, the Saudi shareholders are completely in opposition to the acquisition. However, they do not represent enough ownership to prevent the deal from happening and most likely are unable to influence other shareholders to follow suit. As for SEC, Musk has had some feuds with them in the past over his “funding secured” statement he made in regards to his other company Tesla and that may pose some obstacles to his takeover.
NYSE: TWTR Daily Chart
Markets reacted positively to the offer acceptance and closed 5.63% higher than the previous day. It has surpassed the half-century mark and is heading straight for the recent swing high as it breaks past the 200 daily moving average.
There are mixed reactions from Twitter users. Some users tweeted #RIPTwitter and decided to leave the platform when Elon Musk takes over, while on the other hand politicians like Senator Ted Cruz, Greg Abbott and Marsha Blackburn fully back Musk’s takeover.
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