Elon Musk has taken a swipe at the Twitter board after his push to purchase the microblogging app was undermined by the ‘poison pill’ that the board adopted on Friday.
Musk went on to criticize the board on Twitter during the weekend for turning down his offer. He accused them of holding the company back from growth, saying they’re irresponsible for turning down his bid.
Last week, the Tesla CEO made a $43 billion takeover bid for Twitter. Musk said he invested in Twitter because he believes in its potential to be the platform for free speech around the globe. But now realize “the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
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Earlier, before making the bid for a hostile takeover, Musk had bought a 9.2% stake in Twitter, making him the largest shareholder. But that was quickly countered by one of Twitter’s biggest shareholders, Vanguard Holdings, who upped its shares to 10.3 percent, toppling Musk.
Musk had asked that Twitter shareholders, not only the board, be allowed to vote on his bid. He believes his offer, which is roughly $6 billion above Twitter’s current $37 billion market capitalization, is “best and final.”
Weighing in on the matter, Twitter co-founder and former CEO Jack Dorsey, joined Musk in criticizing the board. Dorsey said in a series of tweets where he responded to questions that as a public company, Twitter has always been “for sale.”
When asked why he owns close to nothing as Twitter founder, Dorsey said the board took most of his shares when he was booted out as the CEO in 2008, labeling the board as “consistently the dysfunction of the company”. He also agreed with venture capitalist Gary Tan, who said that a badly run board “can literally make a billion dollars in value disappear.”
Musk had implied that the board had no economic interest in Twitter to protect as they own little to nothing of the company’s shares. “With Jack departing, the Twitter board collectively owns almost no shares!” Musk wrote. “Objectively, their economic interests are simply not aligned with shareholders.”
Out of 12 members of the Twitter board, only Dorsey owns more than 1% at 2.253%, and he will be leaving the board next month.
The unexpected criticism from Dorsey is not clearly going to pave the way for Musk as some shareholders had criticized the bid, saying it doesn’t measure up to Twitter’s value. Musk said he will not make another offer, giving the board a seeming win as investors are unlikely to back his bid that some have already said it’s not enough.
However, there is another hurdle to Musk’s push to acquire Twitter. Investors have been skeptical that he would be able to cobble together the funds needed to buy Twitter, according to a report by New York Times. Analysts have estimated Mr. Musk would need $15 billion to $20 billion in debt to fund his efforts.
This is because Musk’s wealth is largely tied up in stock.
But there is a potential participation in the bid. The Times reported, citing sources, that private equity firm Apollo Global Management is considering participating in the bid by offering debt financing to potential buyers, including the Tesla chief executive Elon Musk.
The Times also reported on other potential buyers. At least one other private equity firm, Thoma Bravo, has expressed interest in acquiring Twitter. However, it is not clear if Musk is willing to team up with others to push his bid. What is clear is that Musk’s bid to acquire Twitter, though stagnant for now, is still possible.