Elon Musk has made an offer to buy Twitter at $54.20 a share, valuing the company at roughly $43 billion.
The Tesla CEO disclosed his "best and final" bid to acquire the publicly traded social network and take it private early Thursday, saying in an SEC filing that "I don't have confidence in management" and telling Twitter board chairman Bret Taylor that he would improve the company.
"Twitter has extraordinary potential," Musk said. "I will unlock it."
The offer is the culmination of a whirlwind few weeks for the world's richest man, who earlier this month paid nearly $3 billion for a 9.2% ownership stake, which immediately made him Twitter's largest shareholder. In the ensuing 10 days, Twitter announced that Musk would be joining its board, but he changed course the day his term was set to start.
Musk said Thursday that if his takeover offer was not accepted, he "would need to reconsider my position as a shareholder." In a statement, the company said that the "Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders."
Musk's takeover bid is unprecedented, Dan Ives, an analyst for Wedbush, tells CNBC Make It.
"This is something never seen in the history of the public markets," Ives says. "It's a 'Twilight Zone' for anyone who has followed Wall Street for the past 100 years."
Shares of Twitter are up 17% since Musk's 9% stake was initially disclosed on April 4. They have seesawed as different reports about Musk's involvement with the company emerged.
Here's a look at what Musk has said about Twitter over the past few days, as well as how his takeover bid might play out.
Why does Musk want to buy Twitter?
In his SEC filing, Musk said that he believes Twitter has the "potential to be the platform for free speech around the globe."
Musk has been a vocal critic of Twitter, suggesting that the platform stifles free speech. After deciding not to join the board, he liked a tweet suggesting that "Elon was told to play nice and not speak freely."
"This social media platform and freedom of speech are huge passions of his," Ives says. "It's become a divisive issue for him. And he's decided to take the baton and try to change it."
Recent tweets from Musk indicate that he would use his power over the company to push back against content moderation policies and efforts to rid the platform of users that violate Twitter's guidelines.
Over the past week and a half, Musk has also publicly called for several changes to the platform, including the addition of an edit button and the ability for users who subscribe to Twitter Blue to pay with dogecoin.
Musk has not yet laid out any sort of master plan for his vision for Twitter, but he has said he would bring "significant improvements" to the platform.
Can Twitter's board say no?
Experts are split on how Twitter's management should respond to Musk's bid. At $54.20 a share, it is significantly higher than the $39.91 the stock was trading at before it was revealed that Musk had bought a stake in the company.
CNBC's Jim Cramer said the board has "no choice but to reject" the offer and advocate for the company's shareholders. Gordon Haskett Research Advisors analyst Don Bilson also said the chances of the board accepting the proposal are slim, CNBC reports.
Instead, Bilson said that Musk is "just blowing smoke." He adds that "the board would be accused of being 'high' if it decided to sell for $54.20" when the stock was trading around $70 last summer.
Wedbush's Ives, meanwhile, says that the premium on the stock price makes it difficult for the board to say no. He added that a rejection would likely "cut the stock in half."
"They can't just reject a bid because they don't like Musk. They have a fiduciary responsibility as a board, as a public company," Ives says. "If that happens, the board would be eating lawsuits for breakfast."
Billionaire Dallas Mavericks owner Mark Cuban speculated on his own Twitter feed that the company "will do everything possible not to sell" to Musk and will instead try to find "a friendly to come in and buy Elon's shares and get him out."
What happens next?
Twitter's board, which includes co-founder Jack Dorsey and recently-appointed CEO Parag Agrawal, will convene on Thursday to assess Musk's offer.
During an appearance at the TED2022 conference in Vancouver Thursday afternoon, Musk admitted that he was "not sure" he'll be able to buy Twitter. But, Musk said, there is a "Plan B" if his offer is turned down. He did not elaborate on what that would be.
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