Elon Musk has three potential options for responding to the poison pill unanimously adopted by Twitter’s board on Friday, as outlined by Wedbush Securities analyst Dan Ives.
The plan, which aims to prevent Musk from increasing his 9.2% Twitter stake to 15% or more, was enacted following his $54.20 per share offer to take the social media giant private.
TWITTER SHOWING ‘DYSFUNCTIONALITY’ WITH POISON PILL MOVE, MARKET EXPERT SAYS
Outline a Strategy & Vision
Musk’s first choice, according to Ives, is to lay out his financing, strategy and vision for Twitter in a letter and presentation to the board and shareholders.
“Given Musk’s antics over the years as well as comments at last week’s TED conference, the Street remains skeptical on this bid and more details need to be highlighted to get more investors on board and increase pressure on the board,” Ives wrote in a note to clients on Sunday.
Find Strategic Partners
The second option would be to find a strategic partner and increase the $43 billion bid to the roughly $60 per share threshold that many Twitter shareholders appear to find more appropriate for a deal.
“Getting a deep pocketed private equity partner would also lighten the load for Musk and overall increase the attractiveness and viability of the bid in the eyes of shareholders,” Ives adds.
Bail on Twitter
The third and most unlikely move for Musk would be to exit his position by selling his Twitter shares.
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Musk teased during the TED2022 conference last week that he has a plan B if his Twitter bid is rejected. However, he has declined to elaborate on that plan.
Sources told the New York Post on Friday that Musk is currently considering bringing in investors who could partner with him on a bid. The outlet also reported that private equity firm Thoma Bravo is considering the possibility of making a counteroffer for Twitter.
In addition, some investors have speculated that Musk could possibly consider a tender offer for Twitter after the billionaire tweeted the words “Love Me Tender” with music notes, a nod to the Elvis Presley song.
A representative for Thoma Bravo declined to comment on rumors or speculation. Twitter declined FOX Business’ request for comment. Representatives for Musk did not respond at the time of publication.