One Option for Twitter on Musk: 'Poison Pill'

On Thursday morning, Elon Musk offered to buy Twitter for $43 billion. Hours later, he said he's "not sure" he'd be able to pull off the deal, reports CNBC. Speaking at the Ted2022 Conference in Vancouver, the richest man in the world (with an estimated worth of $273 billion) said he can "technically afford it" and has "sufficient assets," but his comments cast new doubt on the financials of any such deal. He added there was a "Plan B" if the deal fell through but did not elaborate.

• The money: The Wall Street Journal previously weighed in, noting that Musk's offer was contingent on “completion of anticipated financing.” Musk has described himself as "cash poor," so he'd surely need big help from a bank. He could use his Tesla stakes as collateral, which would "in theory" get him to $43 billion, per the Journal. But his finances would be strained, and it's not clear any bank would sign on to that kind of a deal.
• Now what: Twitter's board will probably take a few days to assess the offer before deciding, per the New York Times. If it rejects the offer as inadequate, "it can put in a defense mechanism known as a poison pill that limits the ability of Mr. Musk, and every other shareholder, to buy up Twitter shares in the open market," writes Lauren Hirsch. By doing so, the board could still decide to sell, "but without the pressure of Mr. Musk—or any other suitor—threatening to acquire it by buying a significant number shares in the open market." One potential alternative suitor mentioned is Microsoft.

• A worry: Debate on the pros and cons of a Musk takeover was robust after the offer. "I am frightened by the impact on society and politics if Elon Musk acquires Twitter. He seems to believe that on social media anything goes," tweeted Washington Post columnist Max Boot. "For democracy to survive, we need more content moderation, not less." The prospect of Musk letting Donald Trump back on the platform was part of the debate.
• A counter: Boot's sentiment got a lot of pushback from the right, notes the Hill. “Kill freedom of speech to save democracy? Say you’re a communist. Just say it,” wrote Rep. Marjorie Taylor Greene, who has been penalized by Twitter at times. “You’re actually scared of people freely discussing ideas and saying words. You’re terrified of the impact on politics when truth isn’t censored. I’m offended by your weakness.”

• Unlikely? Musk called this his "best and final offer," and that language "will make it easier for Twitter's board to reject," writes Felix Salmon at Axios. "Musk is close to Twitter co-founder and board member Jack Dorsey, (but) it's hard to imagine there's a level of goodwill towards him in the Twitter boardroom that would militate in favor of accepting his (extremely vague) offer."
• Another point: Should we take Musk's offer seriously? "Yes. And no," writes Peter Kafka at recode. Yes, because Musk is so rich, and no because he is "maddeningly inconsistent" and might change his mind in a few days. Whatever comes of Musk's offer, Kafka thinks Musk raises a valid point that Twitter might be better off as a private company. Despite its huge presence as a messenger platform, Twitter pulls in a relative pittance compared to other tech behemoths. As it currently stands, "Twitter isn’t the world’s worst business," writes Kafka. "It’s just not a great one."

(More Elon Musk stories.)