Elon Musk Offers to Buy TwitterElon Musk Makes Offer to Buy Twitter

Update, 3:05 p.m. Eastern time, April 25: Elon Musk struck a deal on Monday to buy Twitter for roughly $44 billion. Follow the latest updates →

Worries inside Twitter as employees consider Elon Musk’s takeover bid.

Tensions were running high across Twitter as news of Elon Musk’s takeover bid of the company spread across the service on Thursday, with users contemplating what the service could look like under the billionaire’s watch.

Inside Twitter, things were little different. Many employees felt rocked by the news over the last 10 days that Mr. Musk wished to purchase the company and reshape it in his image.

To quell employee concerns, Twitter management called an emergency all-hands meeting for 2 p.m. on Thursday. It was led by Parag Agrawal, the company’s chief executive, according to five employees who attended and were not authorized to talk publicly.

Among the most pressing issues: Was this takeover bid for real? And if so, will Mr. Musk overhaul the service that many of Twitter’s employees have spent years thinking about, tweaking and refining with a painstaking level of care?

Mr. Agrawal tried to put on a strong face when rallying the troops, telling employees that he felt that “everything would work out as it should,” two of the people said.

Some employees expressed frustration that Mr. Agrawal had not been more forthcoming as Mr. Musk first began quietly buying up enormous amounts of the company’s stock, according to two of the people. Mr. Agrawal said that the board had spoken with Mr. Musk several times and its members believed that they were aligned on key issues.

Other employees suggested Mr. Agrawal should be tweeting more to counter Mr. Musk’s aggressive tweets. And still others asked what a takeover would do to their stock compensation and to the company’s culture, which is known to be inclusive, given the stories of racism in Tesla facilities.

Employees also asked whether Twitter was considering options, such as an acquisition by another company or a poison pill, to block Mr. Musk.

Mr. Agrawal said that while he understood the situation was frustrating, he was legally not allowed to disclose what was going on in great detail. He said that the board would conduct a rigorous review of Mr. Musk’s offer and make a decision that was in the best interest of Twitter shareholders.

But he urged employees to look beyond the initial chaos surrounding the company and continue to focus on the work in front of them — even if it meant tuning out Mr. Musk’s antics.

“This provides all of us with this moment where we feel distracted, where we feel a loss of control,” Mr. Agrawal told employees. “I am personally going to spend my time focusing on things I can control, and I believe it will matter.”

Another employee expressed frustrations that Mr. Musk, the potential future owner of the company, was essentially backing Twitter into a corner, something that scared many staffers who are familiar with the billionaire’s history of erratic behavior. One staffer compared it to a “hostage situation.”

Mr. Agrawal tried to soothe the concerns, though some felt the meeting was lacking in substance after it ended at around 2:35 p.m.

“I don’t believe we are being held hostage,” Mr. Agrawal said to employees.

A Twitter representative declined to comment on the meeting.

Musk wants to ‘unlock’ Twitter’s potential for free speech.

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Elon Musk’s offer values Twitter at roughly $43 billion.Credit...Susan Walsh/Associated Press

Elon Musk, the world’s richest man, has a launched a bid to take over Twitter, a move that could have broad implications for a social network where world leaders, lawmakers, celebrities and more than 217 million other users conduct daily public discourse.

The bid came just weeks after Mr. Musk became the company’s largest shareholder (though his holdings appear to have been eclipsed since then by the investment management giant Vanguard). He offered $54.20 a share, valuing the company at roughly $43 billion.

Mr. Musk, a Twitter power user with nearly 82 million followers, has long argued for the need for unfettered public speech. He has repeatedly criticized Twitter for moderating its platform too restrictively, and he previously floated the notion of radically shifting the power in social networking to users and away from behemoth companies.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe,” Mr. Musk said in a letter sent to Bret Taylor, the chair of Twitter’s board, on Wednesday. “I believe free speech is a societal imperative for a functioning democracy.”

How Would a Twitter Takeover Work?

Melina Delkic
Melina Delkic📍 Reporting from New York

How Would a Twitter Takeover Work?

Melina Delkic
Melina Delkic📍 Reporting from New York

Elon Musk submitted a take it or leave it offer for Twitter, offering $54.20 a share for 100 percent ownership.

But what exactly does that mean and what happens now? Here’s what we know so far →

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Earlier this month, a regulatory filing revealed that Mr. Musk, the chief executive of Tesla and SpaceX, had bought a 9.2 percent stake in Twitter. The next day, Twitter announced Mr. Musk would join its board, but by the weekend he rejected the offer.

“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form,” he added in his letter to Mr. Taylor. “Twitter needs to be transformed as a private company.”

Mr. Musk has long used Twitter to insult critics, troll short-sellers of Tesla and propose grandiose ideas about space travel. He has also spread inaccurate information about the pandemic. He mused on Twitter about taking Tesla private in a tweet in 2018 and inaccurately claimed he had secured funding for the transaction, after which he was fined $40 million by the S.E.C.

If his takeover offer is not accepted, Mr. Musk said, he would “need to reconsider my position as a shareholder,” according to the letter sent Twitter’s chair.

“Twitter has extraordinary potential” Mr. Musk wrote. “I will unlock it.”

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Twitter’s board is weighing a plan to thwart Musk’s takeover attempt.

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Twitter’s headquarters in San Francisco. Credit...Laura Morton for The New York Times

Twitter’s board is considering a defensive move known as a poison pill that would severely limit Elon Musk’s ability to acquire the social media giant, two people with knowledge of the situation said.

The board met on Thursday to discuss Mr. Musk’s offer to buy the company, according to one of the people, who wasn’t authorized to speak publicly. The directors are weighing whether to move ahead with the poison pill — formally called a shareholder rights plan — that would limit the ability of a single shareholder, like Mr. Musk, to acquire a critical mass of shares in the open market and force the company into a sale.

The poison pill defense is a common tactic used by companies that want to fend off unwelcome takeover offers. It essentially lets the company flood the market with new shares or allow existing shareholders other than the potential acquirer to buy shares at a discount. This dilutes the bidder’s stake and makes buying shares more expensive.

The Wall Street Journal earlier reported that Twitter was weighing a poison pill.

If Twitter’s board rejects Mr. Musk’s bid, he could put his offer directly to shareholders, rather than the board, by launching a so-called tender offer. If Twitter’s other shareholders like Mr. Musk’s offer, which is currently at $54.20 a share, they could sell their stock directly to the billionaire, allowing him to gain control of the company.

“It would be utterly indefensible not to put this offer to a shareholder vote,” Mr. Musk said in a Twitter post on Thursday. “They own the company, not the board of directors.”

But Twitter’s investors on Thursday seemed underwhelmed with Mr. Musk’s bid, potentially over concerns as to how he would finance it. While shares of companies typically rise when there is takeover speculation, Twitter’s were down almost 2 percent on Thursday.

Prince Al Waleed bin Talal of Saudi Arabia, who described himself as one of Twitter’s largest and most long-term shareholders, said that Twitter should reject Mr. Musk’s because the offer was not high enough to reflect “intrinsic value” of the company.

Twitter’s other top shareholders, according to FactSet, include the Vanguard Group, the company’s largest shareholder, with a 10.3 percent stake; Morgan Stanley Investment Management, with a 8 percent stake; and BlackRock Fund Advisors, with a 4.6 percent stake. Vanguard and Morgan Stanley Investment Management declined to comment on Mr. Musk’s bid. BlackRock did not immediately respond to requests for comment.

Mr. Musk turned down a seat on Twitter’s board over the weekend, leaving directors who had recently welcomed him to their ranks to weigh a proposal in which Mr. Musk said he had no confidence in their management of the company.

The board is made up of Twitter insiders, including Jack Dorsey, a co-founder, and its chief executive, Parag Agrawal, in addition to independent directors.

Bret Taylor, the co-chief executive of the business technology company Salesforce, chairs the board. Mr. Musk texted Mr. Taylor on Wednesday evening, making his intent to buy Twitter known, according to a regulatory filing. “After the past several days of thinking this over, I have decided I want to acquire the company and take it private,” Mr. Musk wrote.

Salesforce considered purchasing Twitter in 2016, but the deal never materialized. Mr. Taylor, who has been on Twitter’s board since 2016, joined Salesforce a year later after it acquired his own company, Quip.

Another key player on the board is Egon Durban, the co-chief of Silver Lake, a private investment firm. Mr. Durban joined Twitter’s board in 2020 as part of a deal the company struck with another activist investor who wanted to shake up Twitter’s management.

At the time, Silver Lake invested in Twitter and helped steady its management, preventing the immediate ouster of Mr. Dorsey. Because Silver Lake has helped Twitter out of a difficult situation in the past, Mr. Durban could face questions about whether his firm can double down and help fend off Mr. Musk.

Mr. Dorsey could also influence the decision. He is friendly with Mr. Musk and initially celebrated Mr. Musk’s investment in the company and decision to join the board. But Mr. Dorsey has often delegated major decisions to his team, preferring to rely on their expertise. And Mr. Dorsey is also set to leave the Twitter board next month, which could give him another reason to recuse himself.

His allies on the board are Mr. Agrawal, who was named as his successor late last year, and Patrick Pichette, a general partner at the venture capital firm Inovia Capital and the former chief financial officer at Google.

Mr. Agrawal and Mr. Dorsey have been closely aligned on a vision to make Twitter’s technology more decentralized, and Mr. Pichette has been a close confidant of Mr. Dorsey in discussions about the long-term plan for Twitter. Mr. Pichette may also have experience negotiating with Mr. Musk — he was at Google in 2013 when it considered buying Tesla.

Mike Isaac contributed reporting.

What happens next in Musk’s Twitter takeover offer.

Elon Musk has offered to buy Twitter at a valuation of about $43 billion. Here is what will — or could — happen next:

The board reviews the offer. The board will work with its advisers at Goldman Sachs to review Mr. Musk’s offer. They will have to consider, among other things, whether the deal fairly values the company, and whether Mr. Musk has the financing to cobble together a deal.

The board cannot simply decide it does not like Mr. Musk as a suitor, but they can “come up with reasons why they don’t like the bid,” like, for example, his ability to fund it, said Steven Davidoff Solomon, a professor at the School of Law at the University of California, Berkeley.

The board announces its decision. The board will likely take up to a few days to review the offer. If it rejects the offer, it can go in one of several ways: 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.

Once it does that, it could still decide to sell itself, but without the pressure of Mr. Musk — or any other suitor — threatening to acquire it by buying a significant number of shares in the open market.

There are reasons Twitter may opt not to do a poison pill. It might be wary of potential criticism that a poison pill is deflecting the concerns of a highly vocal member of its community.

Likewise, Mr. Musk, whose last reported stake in Twitter was a little over 9 percent, has incentive to keep his proportion of Twitter shares below 10 percent. Once he hits that threshold, he is limited in how quickly he can sell out of the company.

Assuming Twitter rejects the offer, Mr. Musk could raise his offer — despite having already said it was best and final. He could also take the bid directly to other shareholders, through what is known as a tender offer, in which he would buy shares from other shareholders.

Still, at least one shareholder has already said the bid undervalues the company.

The board potentially looks for a white knight. “Twitter has essentially been for sale since they went public,” said Howard Berkenblit, who leads the Capital Markets group at law firm Sullivan & Worcester.

Mr. Musk’s latest activity most likely heightened interest in and Twitter’s amenability to a deal. Some private equity firms may be put off by Twitter’s limited cash flow, but a number of technology companies may take a look, given heightened interest in the social media giant’s power and reach.

There could be big suitors. Recall that Microsoft, which owns LinkedIn, and Oracle both vied for a deal with video sharing company TikTok. Still, potential antitrust considerations would likely be a significant deterrent, given the Biden administration’s scrutiny of big technology deals.

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The back story to Elon Musk’s TED talk was Elon Musk.

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Mr. Musk being interviewed by Chris Anderson, the head of TED, on Thursday.Credit...TED

Elon Musk, the chief executive of Tesla and SpaceX, said Thursday that from a young age he had been driven by an “obsession with truth.” In the same interview, though, onstage at the 2022 TED Conference in Vancouver, British Columbia, he tried to bend truth toward his own favorable interpretation and recast moments from his own personal history.

In a nearly hourlong interview, Mr. Musk publicly displayed what some have called his “reality distortion field,” a “Star Trek”-inspired term used to describe how successful business leaders like Apple’s Steve Jobs were able to convince workers that seemingly impossible visions could be realized. At Tesla and SpaceX, Mr. Musk’s reality distortion field has been lionized as a major reason his companies have succeeded in mainstreaming electric vehicles and privatizing space launches.

On Thursday, a public audience got to see Mr. Musk’s reality distortion field in full effect. In a video interview shown before the live discussion, he said this year would be when his company’s vehicles achieved full self-driving capabilities. That followed a 2016 prediction that a Tesla would be able to drive across the country on its own within two years, and a statement in 2019 that he was “certain” his cars would be fully autonomous by the end of that year.

During the live interview, with Chris Anderson, the head of TED, Mr. Musk used some of his time to relitigate the founding of Tesla, which has been a sore spot for the world’s richest human. For years, Mr. Musk has tried to dispel the notion that he is not a co-founder of the company even though he was not part of Tesla at its incorporation in 2003 and became involved with the company only by investing in it the next year. In 2009, Tesla’s first chief executive, Martin Eberhard, settled a lawsuit with Tesla and stipulated there were five co-founders of the company, including Mr. Musk.

“A false narrative has been created by one of the other co-founders, Martin Eberhard, and I don’t want to get into the nastiness here, but I didn’t invest in an existing company,” Mr. Musk said at TED. “We created a company.”

He also took aim at the Securities and Exchange Commission as he revisited his 2018 attempt to take Tesla private. That episode, in which Mr. Musk tweeted that he had “funding secured” despite not having such financing, led to an S.E.C. investigation and lawsuit. He settled the case in 2018 by paying a $20 million fine and stepping down as chairman of the company.

On Thursday, he pushed to recast that recent history, claiming that he had been forced to concede to the S.E.C. because of Tesla’s “precarious financial situation” and pressure from banks providing working capital.

“The S.E.C. knew funding was secured, but they pursued an active public investigation nonetheless,” Mr. Musk said, adding: “I was forced to admit that I lied to save Tesla’s life, and that’s the only reason.”

He’s also fighting that settlement in court. Last month, Mr. Musk’s lawyers asked a federal judge to end a consent decree he signed with the S.E.C. as part of his 2018 settlement.

“I would never lie to shareholders,” Mr. Musk wrote in the legal filing. “I entered into the consent decree for the survival of Tesla, for the sake of its shareholders.”

Musk, in a live interview, says he has a Plan B if Twitter’s board rejects his offer.

Elon Musk was interviewed Thursday at the TED 2022 conference in Vancouver, British Columbia, in an appearance that was arranged before the news of his bid broke.

  • 11 a.m. Pacific time: Answering the last question of the interview, Mr. Musk says he is trying “his hardest” to deliver a good future for his children and for others. “I love humanity, and I think that we should fight for a good future for humanity and I think we should be optimistic about the future and fight to make that optimistic future happen.”

  • 10:47 a.m.: Mr. Musk also described the manufacturing challenges he had faced at Tesla and discussed plans to grow the auto manufacturer.

  • 10:43 a.m.: Mr. Musk declined to say what he would do if the Twitter board rejected his offer, but indicated he had a plan for that outcome, replying “Yes” when asked whether he had a Plan B. He also conceded, “I don’t like to lose.”

  • 10:41 a.m.: Mr. Musk insists funding was secured when he announced on Twitter that he planned to take Tesla private. “I was forced to concede to the S.E.C., unlawfully,” Mr. Musk said, referring to the regulators with an insulting word, adding, “and now it makes it look like I lied when I did not in fact lie.” He added, “I was forced to admit that I lied to save Tesla’s life, and that’s the only reason.”

  • 10:39 a.m.: Mr. Musk, asked whether “funding is secured,” said that he could afford to buy Twitter if the company agreed to the deal. “I have sufficient assets,” he said, adding: “I can do it if possible.”

  • 10:33 a.m.: Pressed several times about the role of human moderators and judgment in deciding which tweets should be removed from the service, Mr. Musk did not answer.

  • 10:30 a.m.: Mr. Musk said he wanted Twitter to move to an open-source algorithm so that users could review the code making decisions about which tweets to promote. In his view, it would be a corrective to the status quo of “having tweets sort of be mysteriously promoted and demoted with no insight into what’s going on.”

  • 10:27 a.m.: “I’m not sure that I will actually be able to acquire it,” Mr. Musk said. “And I should also say, the intent is to retain as many shareholders as is allowed by the law,” though he added, “I could technically afford” to buy out all shareholders.

  • 10:25 a.m.: “My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don’t care about the economics at all,” Mr. Musk said.

  • 10:22 a.m.: Mr. Musk took the stage, and was immediately asked about his bid to buy Twitter. He responded at first with laughter, covering his mouth.

    “I think it’s very important that it be an inclusive arena for free speech,” Mr. Musk said. “Twitter has become kind of the de facto town square. So it’s just really important that people have both the reality and the perception that they are able to speak freely within the bounds of the law.”

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Conservatives cheer on Elon Musk’s pursuit of Twitter.

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Jason Miller, a former adviser to Donald J. Trump, founded a right-wing alternative to Twitter last year called Gettr.Credit...Sam Hodgson for The New York Times

The possibility that Elon Musk could buy Twitter and radically reshape how it distributes and monitors content was cheered by conservative commentators and activists on Thursday.

Many on the political right have accused Twitter — and the major social media and technology companies more broadly — of engaging in censorship by removing false and misleading content and blocking the people who often promote it, most notably former President Donald J. Trump.

“Musk has made clear that in order to be saved, Twitter needs a wholesale teardown to the foundation, its leadership must be removed, and the politically discriminating ideologues running day to day operations must be replaced,” said Jason Miller, chief executive of the right-wing Twitter alternative called Gettr.

Mr. Trump was permanently banned from Twitter after the Jan. 6 assault on the Capitol last year. And in the months prior, YouTube, Facebook and Twitter began more aggressively policing misinformation about divisive issues like voter fraud, the coronavirus and vaccines.

Since then, allies of the former president like Mr. Miller and others have been building their own social media networks that operate independently of Google, Amazon and other tech heavyweights that have significant control over what kind of content can be posted online. In addition to Gettr, there is the video sharing platform Rumble and Mr. Trump’s own Truth Social.

On Thursday, reaction to Mr. Musk’s offer from the right played out on these platforms.

Dinesh D’Souza, the conservative author, wrote on Gettr that Mr. Musk was the kind of man who could “help rescue our society and our civilization” with his wealth. “Elon Musk is willing to do what only he can do,” Mr. D’Souza said. “He is putting a substantial chunk of his vast fortune on the line to save free speech in America.”

In the days since Mr. Musk began his pressure campaign, critics of Twitter who argue that posts from conservatives are often mislabeled and censored have cheered on the billionaire entrepreneur.

“The widely reported pervasive fear among the Twitter workforce that Elon Musk may endanger or even end their systemic censorship regime illustrates how central of a tactic internet censorship has become for US liberalism,” wrote the journalist Glenn Greenwald, a frequent critic of the progressive left. “Information control is vital to their worldview,” he added.

On the other side of the debate over online censorship, some greeted the news with a sense of alarm.

“I am frightened by the impact on society and politics if Elon Musk acquires Twitter,” wrote Max Boot, a columnist with The Washington Post. “He seems to believe that on social media anything goes. For democracy to survive, we need more content moderation, not less.”

Others pointed out the hypocrisy of self-styled free speech advocates who can be thin-skinned themselves.

“When I criticized Musk for worker violations at Tesla, he blocked me,” wrote Robert Reich, a former Clinton administration labor secretary. “When a college student started a Twitter account to track Musk’s private plane, Musk tried to buy him off, before blocking him.

“Does that sound like a ‘free speech absolutist’ to you?”

Twitter’s stock drops, suggesting markets aren’t convinced by Musk’s bid.

After an initial pop, Twitter’s share fell on Thursday, as investors assessed Elon Musk’s announcement of a $43 billion takeover bid for the company.

Mr. Musk offered $54.20 a share, representing a 54 percent premium over the share price the day before he began investing in the company in late January, according to the regulatory filing that revealed his offer. That was also about 18 percent more than the closing price on Wednesday, before the bid was revealed.

Shortly after trading opened on Thursday, Twitter’s stock began to fall, and it closed the day down 1.7 percent, at about $45. That is far below Mr. Musk’s bid, suggesting that traders are skeptical of his proposal.

Twitter’s share price

Source: Sentieo

By The New York Times

Prince Alwaleed bin Talal of Saudi Arabia, a longtime Twitter shareholder, tweeted that Mr. Musk’s offer did not meet the “intrinsic value” of the company and said he would reject it.

When investors assess a takeover offer for a company, if they consider it credible the share price typically trades at or near the bid price, since that is what shareholders would receive if the acquisition is completed. Sometimes the shares can even trade above the offer, if investors think that there could be a bidding war between multiple suitors, or if the target company can hold out for a higher offer from the buyer.

Although Twitter’s stock is more than 15 percent higher than it was when Mr. Musk first revealed that he had bought a big stake in the company, it has traded much higher than that over the past year or so.

Shares of Twitter, which went public in late 2013, rose during the pandemic, reaching a record $77.06 in February 2021, well above the price that Mr. Musk said shareholders would “love” in his outreach to Twitter’s board.

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Musk’s Twitter bid appeared to include a recurring reference to marijuana.

When Elon Musk has been at the center of a media storm, there has been a common thread that has appeared several times.

In some form or fashion, the number 420 — which is often used to reference all things cannabis — has appeared in filings, tweets and interviews related to Mr. Musk and his business. On Thursday, when Mr. Musk’s offer to purchase Twitter became public, the share price he chose — $54.20 — caught people’s attention.

The price was reminiscent of Mr. Musk’s 2018 proposal to take Tesla private at $420 per share.

The Securities and Exchange Commission said that the funding Mr. Musk had alluded to was not so secure and that he had misled investors. In its 2018 complaint, the S.E.C. wrote that Mr. Musk said he had rounded up the share price to $420 from $419 “because he had recently learned about the number’s significance in marijuana culture.” The filing quoted Mr. Musk saying he believed his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”

Later in 2018, Mr. Musk smoked marijuana during an interview on the show “The Joe Rogan Experience,” which was widely shared and turned into memes. He poked fun at that discussion last week on Twitter, sharing one of those memes.

The S.E.C. will likely scrutinize Musk’s Twitter bid, securities lawyers say.

The Securities and Exchange Commission is keeping mum about whether it is inquiring into Elon Musk’s unconventional entanglements with Twitter.

But attorneys who have served at the nation’s top financial regulator say that S.E.C. staff is very likely scrutinizing Mr. Musk’s public statements and his filings related to Twitter for any timing violations or for false or misleading information that indicates he was trying to artificially manipulate the social media company’s stock price.

“I would be shocked if they weren’t paying very close attention to his public statements,” said Alma Angotti, former senior counsel in the S.E.C.’s enforcement division and who now works at Guidehouse, a consulting company.

Because of Mr. Musk’s history of making problematic statements with respect to Tesla, the electric car company of which he is chief executive, Ms. Angotti said she expected S.E.C. attorneys to analyze his every public utterance. But proving that those statements were made to move prices may be difficult, she noted.

“It’s not cut and dried,” she said. “Trying to prove intent to manipulate the market for gain is complicated.”

A spokesman for the S.E.C. declined to comment.

The S.E.C. is also likely to scrutinize how Mr. Musk plans to pay for Twitter, which he offered to buy on Thursday for about $43 billion. Of course, Mr. Musk has plenty of money — Forbes lists him as the world’s richest person.

Earlier this month, the S.E.C. charged the now defunct Xcalibur Aerospace and its chief technology officer with securities law violations for a sham 2020 takeover in the form of an advertisement in The New York Times proposing a purchase of all stock of the industrial conglomerate Textron for a substantial premium over its previous closing price.

The advertisement led to a spike in Textron trading and a subsequent trading halt, all premised on a false promise, the S.E.C. said, contending the defendants left “a trail of bad debts that included never paying for the very advertisement that announced the fictitious offer.”

Mr. Musk has had run-ins with the regulators before. In 2018, the S.E.C. sued him, saying he made “false and misleading” statements to Tesla investors, after he posted on Twitter that he was considering taking the company private. The deal never materialized and Mr. Musk settled with the S.E.C. He agreed to step down as Tesla’s chairman; he and Tesla paid a total of $40 million in fines; and he agreed to submit his Tweets for review before posting them publicly.

Given this history, any scrutiny of his comments or filings could well prompt an outcry from the volatile billionaire, especially since he has said in the past that the S.E.C. has been targeting him because he has criticized the agency.

Marc Steinberg, a former S.E.C. enforcement attorney, author of “Rethinking Securities Law” and law professor at Southern Methodist University in Texas, said any investigation would be conducted privately and could take many months.

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How will Musk pay for Twitter?

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Twitter brought on advisors at Goldman Sachs to help fend off advances from Elon Musk, who offered to buy the company.Credit...Andrew Kelly/Reuters

Elon Musk is the richest person in the world, with a net worth of $270 billion. But there are still questions about how he would finance a takeover of Twitter, which he has offered to acquire at a valuation of about $43 billion.

Why is that?

Mr. Musk’s wealth is mostly tied up in Tesla stock. Although he recently sold billions of dollars worth of those shares, he has paid billions in taxes on the sales and also gave away a big chunk of shares to charity. He can borrow against the considerable Tesla holdings that remain, but the company restricts how much its executives can borrow against stock pledged as collateral, limiting the amount of money he could raise that way.

Mr. Musk has hired Morgan Stanley as an adviser for his Twitter bid, he said in a regulatory filing. People or firms trying to acquire companies often bring on banks for debt financing, a prospect lenders are usually eager to offer, particularly while interest rates are low. The deal to buy and take Twitter private could require $15 to 20 billion in debt financing, according to Dan Ives, an analyst at Wedbush Securities.

It would be a natural step for Mr. Musk to look to a financial partner for help as he did in 2018, when he worked with the private equity firm Silver Lake to try to take Tesla private in a deal worth more than $70 billion. As it happens, Silver Lake has a seat on the Twitter board, which it secured after a $1 billion investment in the company. But the firm also signed a so-called standstill agreement that seemingly limits its ability to participate in such a deal.

Mr. Musk has a checkered history with some of the banks that have worked with him on big-ticket deals before. Last year, JPMorgan Chase sued Mr. Musk for $162 million over a tweet he posted during the 2018 Tesla bid. Mr. Musk claimed he had secured funding to take Tesla private, initially sending the automaker’s shares soaring, but the shares sank when it became clear that no such deal had been reached.

Mr. Musk has also already raised regulatory red flags with his investment in Twitter. He delayed the initial disclosure of his stake to the Securities and Exchange Commission and quickly changed the nature of his filing from one that described his investment as a passive purchase to one that implied he intended to take an active role in influencing Twitter’s operations and strategy.

Twitter, for its part, has brought on advisers from Goldman Sachs to help fend off Mr. Musk, people familiar with the matter told The New York Times. The company has a longstanding relationship with the bank — Twitter’s chief financial officer, Ned Segal, was an investment banker there.

On Tech With Shira Ovide: Elon Musk could be Twitter’s Citizen Kane.

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Credit...Illustration by Nick Sheeran

The word “unpredictable” doesn’t do justice to this moment. We’re already in Week 2 of Elon Musk and Twitter’s very public and rocky romance, and there may be more weirdness to come.

Imagine that Mr. Musk eventually buys Twitter. The closest comparison to this might be the 19th-century newspaper barons like William Randolph Hearst, Joseph Pulitzer and the fictional Charles Foster Kane, who used their papers to pursue their personal agendas, sensationalize world events and harass their enemies.

We have not really had a Citizen Kane of the digital age, but Mr. Musk might be it.

“He would be a throwback to the ‘Citizen Kane’ days of press barons using their newspapers to advance their favorite causes,” Erik Gordon, a professor at the University of Michigan’s business school, told The Times’s Shira Ovide for her newsletter On Tech.

READ THE FULL NEWSLETTER

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What does Musk want?

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Elon Musk offered to buy Twitter on Thursday and said it needs to be transformed as a private company.Credit...Suzanne Cordeiro/Agence France-Presse — Getty Images

Tesla’s chief executive, Elon Musk, is famously enigmatic.

On April 4, when he first disclosed that he had bought enough shares of Twitter to become the social media site’s largest shareholder, he didn’t have much to say and appeared on the surface to be working amicably with Twitter executives. (His share appears to have been eclipsed since then by the investment management giant Vanguard.)

Parag Agrawal, the company’s chief executive, posted tweets supporting the move, calling Mr. Musk “a passionate believer and intense critic of the service, which is exactly what we need.”

But on Thursday, when disclosing that he wanted to purchase the company, Mr. Musk had a lot to say, sharing several critiques of the company and ideas for its future.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Mr. Musk said in the Securities and Exchange Commission filing announcing his offer.

He added, “Since making my investment, I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”

In the days leading up to Thursday’s announcement, Mr. Musk voiced concerns about the relevance of Twitter, its adherence to free speech principles and its financial model, which is based on earning money from advertisements.

After an account posted a list of the 10 most followed Twitter accounts, including former President Barack Obama and the pop stars Justin Bieber and Katy Perry, Mr. Musk over the weekend responded and wrote: “Most of these ‘top’ accounts tweet rarely and post very little content. Is Twitter dying?”

Separately that day, Mr. Musk posted about ideas for Twitter’s subscription service, writing: “Price should probably be ~$2/month, but paid 12 months up front.” He added that accounts would not get the blue check marks associated with verified people and organizations unless those users paid their dues.

After Mr. Musk bought a 9.2 percent stake in Twitter, he was uncharacteristically mum — at least initially — but experts suspected that he may have been keeping his intentions quiet.

‘I have moved straight to the end.’ What Musk just said about his Twitter takeover bid.

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In a filing with the Securities and Exchange Commission, Elon Musk disclosed his plan to try to take over Twitter.Credit...Andrew Kelly/Reuters

In the Securities and Exchange Commission filing Elon Musk submitted expressing his intent to buy Twitter and make it a private company, Mr. Musk sounded a lot like the activist investor he has become in recent weeks, saying he was not “playing the back-and-forth game.”

Instead, he added, “I have moved straight to the end.”

He continued: “It’s a high price and your shareholders will love it.”

Mr. Musk offered to buy the company for $54.20 per share in cash.

In a section of his filing, a 13D, which must be submitted to the S.E.C. when a person acquires more than a certain percentage of a company’s shares, Mr. Musk reiterated his concerns about free speech on the platform and said he didn’t trust Twitter’s current leadership.

“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” Mr. Musk said in the filing. “This is not a threat, it’s simply not a good investment without the changes that need to be made. And those changes won’t happen without taking the company private.”

Mr. Musk, who has nearly 82 million followers on Twitter and frequently posts there, had been quiet in recent days. He posted a link to the filing shortly after it was made public: “I made an offer.”

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Who is Parag Agrawal, Twitter’s chief executive?

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Parag Agrawal became chief executive of Twitter last year, after Jack Dorsey stepped down from the role.Credit...Ellian Raffoul/Twitter, via Associated Press

When Elon Musk contacted Twitter’s chief executive, Parag Agrawal, to tell him that he intended to buy shares in the company and wanted to discuss changes to the platform, Mr. Musk was reaching out to someone who had already shown interest in some of his ideas.

Mr. Musk and Mr. Agrawal, who became the company’s leader last year after Jack Dorsey stepped down, are known to be friendly. The current and former Twitter chief executives have both expressed views in the past that appear to align with Mr. Musk’s larger vision for a less moderated version of the platform.

Mr. Agrawal had been with Twitter for 10 years before taking on the role, most recently as chief technology officer, and acted as Mr. Dorsey’s confidant. In stepping into the top job, Mr. Agrawal became responsible for bringing to fruition Mr. Dorsey’s ideas for decentralizing Twitter — ideas that Mr. Dorsey and Mr. Musk have discussed publicly on the platform.

In March, Mr. Musk polled his roughly 82 million followers asking them if they agreed that Twitter’s algorithm should be open source, prompting Mr. Dorsey to swiftly respond: “The choice of which algorithm to use (or not) should be open to everyone,” he wrote in a tweet.

This month, after buying a 9.2 percent stake in the company, Mr. Musk had a similar exchange with Mr. Agrawal, who replied to Mr. Musk’s poll on giving users the ability to edit their tweets. “The consequences of this poll will be important,” Mr. Agrawal wrote. “Please vote carefully.” Twitter later announced that it was testing an edit feature for tweets but specified that it “didn’t get the idea from a poll.”

But though Mr. Musk has been chummy with Twitter’s leaders, he was critical of them in the Securities and Exchange Commission document he filed in his bid to take over the company. He said that he didn’t trust leadership to make the changes he saw as urgent, including those that would make Twitter a platform for “free speech around the globe.”

“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” Mr. Musk said in the filing. “This is not a threat, it’s simply not a good investment without the changes that need to be made. And those changes won’t happen without taking the company private.”

Mr. Agrawal has not made any public comments about Mr. Musk on Twitter since announcing this week that Mr. Musk would no longer join the company’s board.

Disclosure issues could complicate Musk’s Twitter bid, legal experts say.

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The S.E.C. will have to determine whether Elon Musk had the intent to violate a disclosure rule or if it was an oversight.Credit...Andrew Kelly/Reuters

Elon Musk’s unusual entanglement with Twitter — which he now wants to buy — has caught the attention not just of Silicon Valley and the social media world, but also some securities lawyers.

Even before Mr. Musk announced on Thursday morning that he had offered to buy Twitter for about $43 billion, his amassing last month of a big block of shares of the social media company caught the eye of a law firm that is suing the billionaire.

On Tuesday, the law firm Block & Leviton filed a federal lawsuit against Mr. Musk on behalf of several Twitter shareholders who they said may have suffered losses while the Tesla chief executive was building a more than 9 percent equity stake in Twitter. The lawsuit is seeking class action status and contends that investors in Twitter who sold shares late last month may have lost out on potential gains because Mr. Musk did not promptly disclose his large ownership stake.

The civil complaint noted that Mr. Musk disclosed he had amassed a 9 percent stake in Twitter — making him the company’s largest shareholder at the time — on April 4, even though he had begun building his stake much earlier. When Mr. Musk finally disclosed his stake in Twitter, the price of the company’s shares surged to $49.97 from $39.31. The lawsuit contends Mr. Musk should have disclosed in a regulatory filing by March 24 that he had acquired a 5 percent equity stake in Twitter.

The Securities and Exchange Commission requires investors to publicly disclose that they have taken an equity stake of 5 percent or more in a company within 10 days of acquiring the shares — a rule mainly intended to force investment managers like hedge funds to disclose their actions in the market.

The lawsuit said that by not making the required filing within that time frame, Mr. Musk saved money by buying Twitter shares at a cheaper price. And he deprived investors who sold shares before the disclosure of the chance to benefit from the price gain.

Ever since Mr. Musk took his big financial position in Twitter, Wall Street and securities lawyers have speculated that the S.E.C. could look into whether the billionaire violated any securities laws by not promptly disclosing his stake.

If the S.E.C. were to investigate the delayed disclosure, it would likely have to consider whether Mr. Musk had the intent to violate the 5 percent filing rule or if it was an inadvertent mistake or oversight.

The S.E.C. declined to comment. An attorney for Mr. Musk was not immediately available for comment.

Dennis Kelleher of Better Markets, a corporate and regulatory transparency watchdog, said regulators had an obligation to look into the disclosure issue to send a message that all investors are treated the same.

“The rule of law breaks down if billionaires get to play by a different set of rules,” he said.

In February, the S.E.C. proposed halving the time frame within which investors must publicly disclose taking a 5 percent equity stake in a company from the current 10 days to five.

Robert Jackson Jr., a former S.E.C. commissioner and now a professor at New York University School of Law, said the apparent delay in disclosure by Mr. Musk could be relevant with regards to the Williams Act — a five-decade-old law that set ground rules for takeover attempts that are deemed unsolicited or hostile.

“The Williams Act was designed to protect investors in exactly this situation — where an acquirer secretly buys shares he then uses as a toehold to launch a bid for the entire company,” said Mr. Jackson, co-director of N.Y.U.’s Institute for Corporate Governance and Finance. “If this isn’t a case that raises Williams Act concerns, it’s hard to know what would be.”

Mr. Musk’s takeover bid for Twitter comes just weeks after he launched an effort to end a four-year-old settlement with the S.E.C. that required his posts on Twitter to be reviewed for potential market moving information by officials at Tesla — the electric car company he runs. The settlement with the S.E.C. resulted from a post on Twitter that Mr. Musk had made about having funding lined up to take Tesla private when in fact he did not have the financing in hand.

Mr. Musk has been frustrated ever since about the settlement and the need for his posts on Twitter to be reviewed. In a court filing, Mr. Musk’s lawyer said the ongoing terms of the settlement amounted to an “unconstitutional restraint on Mr. Musk’s speech.”

Ephrat Livni contributed reporting.

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Read our coverage of Musk’s move on Twitter.

Here’s what New York Times reporters Mike Isaac and Lauren Hirsch wrote on April 4 when Elon Musk disclosed that he had purchased a 9.2 percent stake in Twitter, the social media platform where he has over 80 million followers.

When Elon Musk mulled taking Tesla private in 2018, he posted on Twitter to tell the world about it. When he got stuck in traffic in 2016, he tweeted the idea of an underground tunnel system to alleviate “soul destroying” congestion. And when he challenged President Vladimir V. Putin of Russia to one-on-one combat last month, he broadcast it on Twitter.

Now Mr. Musk is putting his money where he mouths off.

Here is some of our coverage since then.

Elon Musk Joins Twitter’s Board, Pitching Ideas Big and Small: Free speech, open-source algorithms — and an edit button: The world’s richest person will soon help steer the social media platform where he has a huge following.

Elon Musk Will Not Join Twitter’s Board, Company Says: The announcement reverses a decision last week, when Twitter said Mr. Musk would become a board member after amassing a 9.2 percent stake in the company.

Twitter Grapples With an Elon Musk Problem: Mr. Musk is free to buy more stock in the company and could use the platform against itself. Some employees are dismayed.

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