https://arab.news/67u43
RIYADH: Saudi billionaire Prince Alwaleed bin Talal rejected Elon Musk’s offer to buy Twitter for $41.39 billion.
“I don’t believe that the proposed offer by Elon Musk ($54.20) comes close to the intrinsic value of Twitter given its growth prospects,” he said in a tweet on his personal account.
Being one of the largest and long-term shareholders of Twitter, Kingdom Holding Co. and I reject this offer,” he added.
Billionaire Elon Musk has offered to buy Twitter for $41.39 billion, a regulatory filing showed on Thursday.
Musk’s offer price of $54.20 per share represents a 38 percent premium to the closing price of Twitter’s stock on April 1, the last trading day before the Tesla CEO’s over 9 percent investment in the company was publicly announced.
Elon Musk’s offer to buy Twitter sparked concerns among Tesla investors and analysts that the electric carmaker could suffer as the chief executive becomes distracted by his takeover play and the possible sales of Tesla shares to fund the deal.
The idea of Musk working to close that deal, possibly by selling even more of his Tesla stake, and then overseeing yet another company has Tesla observers worried.
“Elon is distracted. He’s got a lot of things going on. He’s involved in a lot of different endeavors,” said Gene Munster, managing partner at venture capital firm Loup Ventures, which owns shares in Tesla. “This is a one to three months headwind to Tesla’s stock.”
Shares of Tesla, the world’s most valuable automaker, fell more than 9 percent since he disclosed his more than 9 percent stake in Twitter last Monday. On Thursday, Tesla’s stock fell 3.7 percent.
While Musk has talked about potential changes he would like to see Twitter make, Tesla faces its own challenges — the need to boost production at new assembly plants in Berlin and Texas, analysts said. Meanwhile, Tesla’s Shanghai factory — its largest — has been idled by the COVID-19 crackdown in China.
“Musk is Tesla, and investors don’t want to see Tesla lose that leadership edge,” Roth Capital Partners analyst Craig Irwin said.
And investors have Musk’s own words prior to this foray on which they base their fears. Last year, he said he worked seven days a week — “crazy hours” — splitting time between Tesla and SpaceX. He also leads brain-chip startup Neuralink and tunneling venture the Boring Company.
Another worry is how Musk will finance a potential deal for Twitter, which would include stock sales and massive loans, analysts said.
Wells Fargo analyst Colin Langan said Musk, who holds over a 9 percent stake in Twitter, would need $39 billion to complete the deal and the sale of more Tesla shares could pressure the stock further.
Read More: Arab world reacts to Elon Musk’s offer to buy Twitter
Tesla executives may pledge their company stock as collateral for loans, but the maximum loan does not exceed 25 percent of the total value of the pledged stock, according to company policy.
This means that he could borrow $42.5 billion by pledging all of his shares worth $170 billion. But he already pledged over half of his Tesla shares as collateral to secure certain personal indebtedness, according to a Tesla filing last year.
Musk said on Thursday he has the assets to buy Twitter, but has not provided details.
