Musk's Offer Puts Twitter In Play

Poor old Elon. He finally makes clear his intentions for Twitter with a $43 billion takeover offer and no one seems to believe it! Just check out Twitter’s stock price: It fell today to close $45.08, 17% below the offer price. Even Musk seems doubtful, telling a TED conference he wasn’t sure he could seal the deal. And Twitter itself is showing every sign of fighting Musk, possibly by introducing a poison pill to fend him off. Musk was reduced to polling Twitter users this afternoon on whether the board should let shareholders decide.

While it’s tough to feel sorry for Musk—he is the world’s richest man—a Musk defeat would be a loss for Twitter’s shareholders. After all, the real issue here is that Twitter has been a poorly run company for years: slow to innovate, with uneven revenue and user growth. Musk, given his entrepreneurial track record, could inject some energy into it. Maybe the new CEO, Parag Agrawal, could turn it around. But why should shareholders have to make that bet? Musk’s offer—or another like it—gives them a chance to exit at a decent price. You can bet that if Musk disappears without a rival bidder emerging, the stock will drop back to the $30 to $40 level where it’s traded for most of the past few years.