Why Twitter Accepted Elon Musk’s Takeover Bid After Initially Blocking $43 Billion Bid

Twitter Inc. (TWTR) on Monday accepted a nearly $44 billion proposal from Tesla CEO Elon Musk to buy the social media platform after initially trying to block the billionaire’s purchase. Musk, who is the founder of Tesla and SpaceX, plans to take Twitter private and should the acquisition receive approval would be among the biggest tech takeovers.

Last week, Twitter fought back against Musk’s $43 billion proposal by using a shareholder rights plan, also known as a “poison pill,” to avoid a hostile takeover. Executives reportedly began reconsidering the bid after Musk revealed he secured $46.5 billion in financing for the takeover.

Sources had told the Wall Street Journal that Twitter executives had planned to meet Sunday about the bid. By Monday afternoon, Musk confirmed Twitter accepted his offer.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement.

“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”

Earlier this month, Musk announced that he acquired a 9% stake on Twitter. Days later, he made the bid to buy the social platform outright for $54.20 a share, or $43 billion.

Twitter had since been trading below Musk's initial offering. As of Monday at 3:50 p.m. ET, shares of Twitter were trading at $51.88, up $2.95, or 6.03%.

The San Francisco-based company is expected to release its first-quarter earnings report for 2022 before the market opens on Thursday.