TechCrunch: Early Stage
Good morning from the West Coast! Today, we’re going to talk about Elon Musk’s unsolicited bid for Twitter, which is taking the technology and business media by storm. Our own Romain Dillet has TechCrunch’s first notes on the matter if you want a newsy overview. Twitter has responded by saying it will examine the offer.
The Price of Acquisition
But let’s dive into the details. Musk’s bid for Twitter has been met with skepticism, and some are questioning whether he is really serious about acquiring the company or just trying to bully his way in. The current price of $54 per share seems a little lowball, especially considering Twitter’s 52-week high of $73.34 per share. If we assume that Twitter misses its growth guidance and only scales to, say, $6 billion, then Musk’s offer is a loose revenue multiple of 7.2x. Is that rich enough to take a well-known public company off the table?
The Growth Story
Twitter shareholders who held through 2021 into 2022 are being asked to accept a far lower price for the company’s shares than they saw in Q3 and Q4 of last year — a period that is not that long ago. If you already owned Twitter stock, you believed in its growth story, else you would have left when the CEO chair turned over last year. That means that Musk is effectively arguing that current Twitter shareholders are sad and want to cash out, not expecting to see 2021 prices for their company return anytime soon. Maybe! But mostly what this saga feels like is this: Musk bought a bunch of Twitter stock, expecting to bully the company into getting his way.
The Musk Method
Musk has been known to make bold moves in the past, and it’s possible that he’s using his 10% stake in Twitter as leverage. However, his initial offer seems somewhat middling, and some are questioning whether he’s really serious about acquiring the company or just trying to get attention.
Topics Covered
- Drama
- EC Market Analysis
- EC Media
- Elon Musk
- Media & Entertainment
Related Stories
- Apple brings Store app to Indian market
- FAA had to divert flights because of SpaceX Starship explosion
- SpaceX catches Starship booster a second time, loses ship to an ‘anomaly’ in space
- Mark Cuban is ready to fund a TikTok alternative built on Bluesky’s AT Protocol
Stay Up-to-Date with the Latest Tech News
Subscribe to our newsletters for the industry’s biggest tech news:
- TechCrunch Daily News: Every weekday and Sunday, you can get the best of TechCrunch’s coverage.
- TechCrunch AI: Our experts cover the latest news in the fast-moving field.
- TechCrunch Space: Every Monday, gets you up to speed on the latest advances in aerospace.
- Startups Weekly: Get our best coverage delivered weekly.
The Bottom Line
Musk’s bid for Twitter has raised more questions than answers. Is he serious about acquiring the company, or is this just another one of his bold moves? Only time will tell, but one thing is certain: this saga is far from over.
