Twitter Inc (NYSE: TWTR) shares are up 5.0% on Thursday after Elon Musk proposed to buy the social networking and microblogging platform for over $43 billion.
Musk’s bid translates to $54.20 a share
The offer translates to $54.20 a share for Twitter stockholders. The nonbinding proposal comes only weeks after Musk took a 9.20% stake in the California-based company.
The CEO of Tesla plans on taking Twitter private if his proposal is accepted. If not, Musk signalled, he might exit his investment in TWTR.
Twitter has extraordinary potential. I will unlock it. But if the deal doesn’t work, given that I don’t have confidence in management nor can I drive necessary change in the public market, I’d need to reconsider my position as a shareholder.
Musk also clarified that he’s not interested in haggling. The $54.20 a share proposal is his “best and final” offer.
Gene Munster reacts to the news
Loop Ventures’ Gene Munster agrees the proposal doesn’t offer a whole lot of premium on the current stock price but says it’s still in the best interest of the investors to accept the offer. On CNBC’s “Squawk Box”, he noted:
I think it probably happens and investors should welcome it because of first orders principle Musk uses. If he charges $1.0 per month per Twitter user, that alone could add 30% to revenue this year. When he talks about unlocking value, I think that’s what’s in play here.
Despite Musk’s remarks, Munster sees “some” probability that the billionaire might revise his bid slightly to the upside.
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