Should investors take Elon Musk’s bid for Twitter seriously? The billionaire Tesla chief just launched a $41 billion cash offer for the social media company, but Wall Street is underwhelmed.
Twitter stock had just a small pop this morning and the share price has wobbled around since. At a little more than $47, it is nowhere near Musk’s bid of $54.20 per share. The news broke after his Thursday SEC filing.
Before this, Musk’s investment interests had been mostly confined to cryptocurrencies and meme stocks. He is a favorite of the Reddit stonks crowd. Musk recently bought a 9.2% stake in Twitter.
Musk claims he can retool Twitter, whose stock has slipped by a third from an all-time high in November. Twitter’s dip comes amid an overall market drop and criticism of the platform for slowing growth and allegedly censoring some users’ views, among other knocks. Note that Musk’s bid is still far below Twitter’s high. Musk said the company he has often criticized must go private to make effective changes.
Adding to the drama is Musk’s threat to sell his entire Twitter stake if his offer is not accepted. His SEC filing included a letter to Twitter’s chair, Bret Taylor, saying that he “would need to reconsider my position as a shareholder.” That could hurt the share price.
Musk is the world’s wealthiest person, according to Forbes, with an estimated net worth of $268 billion. That means he can easily afford to pay for Twitter out of his own pocket and remain at the top of the list. No. 2 Jeff Bezos, of Amazon fame, is worth $179 billion.