Elon Musk, CEO of Tesla and the current biggest shareholder of Twitter, has offered to buy Twitter for $41.4 billion.
Musk is offering $54.20 per share, as reported by a regulatory filing earlier today. According to reports, this was a 38% premium for Twitter at April 1, which was the last trading day before Musk made his recent 9.2% share purchase public.
In a letter to Bret Taylor, Chairman of Twitter, Musk said that Twitter needs to be changed into a private company. He believes the company will not thrive or fulfill its purpose as a modern social media platform if it stays the way it is.
Musk also added that if his offer is not accepted, he will consider moving away from his position as a shareholder of the company.
Earlier this week, Musk was sued by former Twitter shareholders on 12 April.
According to the claims, Musk broke US security laws by delaying the disclosure of his recent 9.2% stake purchase, reportedly worth $2.64 billion.
The class-action lawsuit, filed in Manhattan federal court, states that Musk had made “materially false and misleading statements and omissions” by not disclosing his share purchase.
According to the US federal security law, whenever an investor buys at least 5% of a company, the amount of the share must be disclosed within 10 days of purchase.
Reports state that Musk finalised his Twitter share purchase on March 14. Musk didn’t disclose his share purchase until April 4, long after his deadline of March 24.
The lawsuit was filed on behalf of Marc Rasella, a former Twitter shareholder, who says that due to the delayed disclosure, Musk was able to buy Twitter shares at lower prices. Rasella claims that Musk deflated share prices and financially damaged the investors who had bought Twitter shares in the near two-week timespan Musk kept quiet about his stake.
Reports further state that Musk bought 620,000 Twitter shares, each worth $36.83, on January 1. Since then, he has been accumulating shares until he reached the current 73.1 million mark – owning a 9.2% stake in the company.
After Musk’s disclosure on April 4, the price of Twitter stocks increased 27%, making each share worth about $50. However, because Musk delayed disclosing his share by the legal deadline, he was able to keep buying shares worth $37.69 to $40.96, according to reports.
The lawsuit is seeking compensation for the damage caused. Musk has yet to officially respond to these allegations, yet publicly claiming his desire to buy the company.