In a surprise announcement last week, Elon Musk, 50, was revealed to be Twitter’s largest stakeholder, having purchased a 9.2 percent interest, four times the amount of the company’s co-founder, Jack Dorsey.
It has been speculated that Elon Musk may make a hostile takeover attempt for Twitter after filing documents with the Securities and Exchange Commission (SEC) saying that he would continue to criticize the site and call for reform.
According to experts, billionaire Elon Musk’s decision to withdraw from consideration for a position on Twitter’s board of directors opens the door to a hostile acquisition and might result in more volatility in the stock.
Musk’s choice not to join Twitter’s board of directors signifies that he is no longer restricted to having a 14.9 percent stake. Many observers now believe that Elon Musk, the CEO of Tesla, may be considering a hostile takeover.
NBC notes that Musk, the company’s biggest shareholder, signed a new filing on Monday declaring that he has the right to ‘express his views’ about Twitter’s rules and services to the board of directors or via social media.
According to the form, “Musk may engage in discussions with the Board and/or members… potential business combinations and strategic alternatives, the business, operations, capital structure, governance, management, strategy, and other matters concerning the Issuer”.
“The Reporting Person may express his views to the Board and/or members of the Issuer’s management team and/or the public through social media or other channels with respect to the Issuer’s business, products and service offerings,” the filing added.
The Daily Mail notes that: According to Musk’s initial filing with the Securities and Exchange Commission (SEC), he intended to be a “passive investor.” However, Musk quickly amended the filing to a 13D form, which is more commonly associated with “activist investors” who want to signal their motives to effect change or even take over a company entirely.
Analysts are afraid that Musk may be attempting to launch a hostile takeover of Twitter, which would require him to control at least 50 percent of the company’s shares, as a result of Monday’s amendment.
Monday’s filing indicates that Musk “has no present plans or intentions” to stage such a takeover – though it also states that he “reserves the right to change his plans at any time.”
Analyst Gene Munster says that if he had meant to take over the company, it would have been wiser to go on with the takeover right away. He also said that he believes taking over Twitter is not where Musk wants to spend a significant amount of his time.
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