EXCLUSIVE Twitter under pressure from shareholders to seek an agreement with Musk, sources say

Elona Muska’s Twitter account can be seen on the smartphone in this illustration photo taken on April 15, 2022. REUTERS / Dado Ruvic / Illustration

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April 24 – Reuters People familiar with the things said on Sunday.

While Twitter’s shareholders commented on what a fair price for the transaction would be, many people turned to the company after Musk outlined his acquisition financing plan on Thursday and urged it not to let the opportunity escape the deal, sources said. , speaks on condition of anonymity. Read more

Twitter’s board is expected to find that Musk’s offer of $ 54.20 per share for the company is too low when it publishes quarterly earnings on Thursday. However, some shareholders who agree with this position still want Twitter to look for a better offer from Musko, whose net worth is set at $ 270 billion, according to Forbes, sources told Reuters.

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One of the options the Twitter board has at its disposal is to open its books to Musk and try to persuade him to sweeten his offer. Another would be to request bids from other potential bidders. Although it is not yet clear which way Twitter will take, it is increasingly likely that its board will try to ask Musek for a better offer, even if he rejects the current one, sources said.

“I wouldn’t be surprised if I woke up next week to see Musk increase what he called his best and final offer to maybe $ 64.20 a share,” said one of the fund’s Twitter-investing fund managers, subject to anonymity. to discuss private conversations. with company.

“He could also throw the whole thing away. Anything is possible,” the fund manager said of Musk’s offer.

Shares of Twitter closed at $ 48.93 on Friday, a significant discount on Musk’s offer, reflecting uncertainty about the fate of his offer.

Twitter took the poison pill after Musk made its offer to prevent it from increasing its more than 9% stake in the company above 15% without negotiating an agreement with its board of directors. In response, Musk threatened to launch a tender offer, which it could use to register Twitter shareholder support for its offer.

The Twitter board fears that if it does not try to negotiate an agreement with Musk, many shareholders could support it in the tender offer, sources said. While the poisonous pill would prevent Twitter’s shareholders from offering their shares, the company fears that its bargaining arm would weaken considerably if it turned out to be against the will of many of its investors, sources added.

Musk, CEO of electric car manufacturer Tesla Inc. (TSLA.O), has been meeting with Twitter shareholders since seeking the offer on April 14 to seek support for its offer. Musk said Twitter must be private in order to grow and become a real platform for freedom of speech. Read more

Twitter and Muska did not respond immediately to requests for comments.

The Wall Street Journal reported on Sunday about some of Muska’s meetings with Twitter shareholders. The newspaper also said that Musk and Twitter will meet on Sunday to discuss the acquisition offer.

Pricing expectations among Twitter shareholders regarding the transaction vary widely depending on their investment strategy, sources said. Active long-term shareholders, who together with index funds hold the largest share of Twitter shares, have higher price expectations, some up to $ 60 per share, sources said. They are also more inclined to give Paraga Agrawal, who became Twitter’s CEO in November, more time to boost the company’s stock, sources said.

“I do not believe that Elon Musk’s proposed offer ($ 54.20 per share) is close to Twitter’s intrinsic value given its growth prospects,” Prince Alwaleed bin Talal of Saudi Arabia wrote on Twitter on April 14.

Short-term investors, such as hedge funds, want Twitter to accept Musk’s offer or ask for only a small increase, sources said. Some are concerned that the recent decline in the value of technology stocks amid fears of inflation and economic slowdown make it unlikely that Twitter will be able to bring more value any time soon, sources added.

“I’d say take that $ 54.20 a share and you’re done,” said Sahm Adrangi, portfolio manager at Kerrisdale Capital Management, a hedge fund that owns 1.13 million shares on Twitter, or 0.15% of the company, and was an investor. since the beginning of 2020.

One silver highlight for Twitter’s board is that Musk’s offer to turn his army of Twitter supporters into new San Francisco-based shareholders who could support his offer did not appear to support his offer, sources said. According to sources, Twitter’s retail investor base grew from about 20% before Musk revealed its stake on April 4, to about 22%.

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Report by Svea Herbst-Bayliss in Boston and Greg Roumeliotis in New York; Edited by Will Dunham

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