As they had during the Elliott challenge, Twitter’s board enlisted their bankers at Goldman Sachs to mount a defense. If Musk truly intended to snatch the social media company out of their control, he had two options for doing so. He could bring an offer to the board for them to review, and they could choose to accept if the price was right. Or he could stage a tender offer, naming his price per share and inviting Twitter’s current shareholders to sell off their stock to him. The latter option was riskier for both Musk and the board. A public tender offer could throw Twitter’s stock into seizure, with wildly fluctuating prices as the market tried to bet on the deal and its probability of closing. Musk would have to make more disclosures to the SEC and they would govern the process—inviting his most despised regulator to take a magnifying glass to his plans. And for the board, it would rip control out of their hands. Musk could name any price, bash the company in any way, and create chaos at every turn.
Popularized during the bull market of the 1960s, tender offers became the weapon of choice for hostile buyers as they laid siege to vulnerable companies. A bidder would announce their intentions by placing an ad known as a tombstone in a national newspaper. In the ad, the bidder would name their price, which was usually higher than the stock’s market value, to entice shareholders into selling. A purchase offer would also be mailed to a company’s stockholders, informing them of the opportunity to sell. Such bids often came against a company’s board’s wishes, but shareholders sometimes saw the chance to make some quick money, and they took the bait.
As opposed to a tender offer, a direct offer from Musk was theoretically more appealing for both the billionaire and the board. Musk would face fewer regulatory hoops, and the board could negotiate. Its members could set terms for the deal and attempt to rein in Musk until the transaction could close.
Prolonged negotiations could also buy Twitter’s board more time. As they had during Elliott’s attack, board members could shop for friendlier investors and explore a sale to a more stable buyer. But in order to put the company up for sale, they needed to decide what Twitter was worth. Its bankers at Goldman Sachs set about developing financial models to determine a reasonable price.
By the next day, Taylor wanted to move on from the board seat offer. Musk was a pain in the ass, and there was no sense in keeping someone on the board who didn’t want to be there. Moreover, he and Agrawal were now sitting on information that was inherently material to Twitter’s stock and its shareholders. If Musk wanted out, they would have to formally tell the SEC. And they would have to disclose his apparent overture to buy the company.
“Acknowledging your text with Parag yesterday that you are declining to join the board. This will be reflected in our 8-K tomorrow. I’ve asked our team to share a draft with your family office today,” Taylor wrote to Musk, using a term for an SEC financial filing that Twitter was obligated to share with the public whenever major changes occurred at the company. “I’m looking forward to speaking today.”
It took nearly two hours for the billionaire to respond.
“Sounds good,” he wrote. “It is better, in my opinion, to take Twitter private, restructure and return to the public markets once that is done. That was also Jack’s view when I talked to him.”
Again, Taylor was blindsided by conversations that a sitting Twitter board member had been having with a loud public critic and potential bidder. Musk kept mentioning his private conversations with Dorsey as justification for his takeover. Why was Dorsey encouraging him?
Taylor thought the board might have time to round up other potential buyers and set off an auction. But Musk moved with characteristic swiftness—and uncharacteristic silence. He kept as quiet as possible for three days, leaving Agrawal, Taylor, and the rest of the board guessing at his next moves. His Twitter account, an expression of Musk’s id and a typically reliable barometer for what he was feeling, remained relatively inactive. His only tweet during the period came on the evening of Sunday, April 10. It was a single emoji of a blushing face with a hand over its mouth. (The post was later deleted.)
On Wednesday, Musk flew from Hawaii to Vancouver for the TED Conference, the annual confab where willing people gave inspirational talks in front of rich people under the motto “ideas worth spreading.” Agrawal crossed paths with him in the air as he headed to Hawaii for some time off with his family. Musk left one girlfriend, Bassett, for another, as Boucher joined him in Canada and used the opportunity to take their son, X, to visit her grandparents in a nearby town. But Musk didn’t join them. Instead, he worked with Birchall from room 1001 at the five-star Shangri-La, hammering out an offer for Twitter.
It was an unusual transaction for Musk. The billionaire and his companies were not known as big spenders. SpaceX rarely made acquisitions, and Tesla had completed only about a dozen deals in its lifetime, the most notable being its $2.6 billion acquisition of solar energy company SolarCity in 2016. Even that transaction was highly suspect. Musk had been SolarCity’s chairman, and it was speculated that he had approved the deal to bail out a floundering company founded by his two cousins, Peter and Lyndon Rive. Acquisitions typically went against Musk’s ethos. He sought to run his companies as efficiently and cheaply as possible, and usually pushed Tesla and SpaceX to find in-house solutions rather than purchase other firms.
Even taking into account the handful of deals he’d orchestrated at Tesla and SpaceX, Musk’s push for Twitter simply had no comparison. He wasn’t buying the social network to glom it on to an existing company. He wanted it for himself. If there was any precedent, it was Jeff Bezos’s $250 million purchase of The Washington Post in 2013, widely perceived as a goodwill project to save one of the great institutions of American journalism. Musk buying Twitter was more than two orders of magnitude larger than that deal, and would give him control over one of the most trafficked and influential sites of the modern internet.
That Wednesday afternoon, Musk broke his monastic silence and texted Taylor. Musk typically made decisions impulsively and enjoyed stepping on the occasional rake, but this time he carefully chose his words. His message seemed to have been vetted by advisers, with a tone that was far too formal to have been tapped out by his own thumbs. Immediately, Taylor understood that Musk was completely serious about going hostile.
“After several days of deliberation—this is obviously a matter of serious gravity—I have decided to move forward with taking Twitter private,” Musk wrote. “I will send you an offer letter tonight, which will be public in the morning. Happy to connect you with my team if you have any questions. Thanks, Elon.”
The two executives had a tense phone call after Musk sent the message. Musk was cold and blunt. He would not tolerate any negotiations, he told Taylor.
“I am not playing the back-and-forth game,” Musk said. “I have moved straight to the end.” His offer would be firm and final, he said.
If the deal didn’t work, Musk said he would consider unloading his Twitter stake, potentially sending the stock’s price spiraling downward. “This isn’t a threat,” Musk said. He simply had no confidence in Agrawal, and the investment was junk if he couldn’t call the shots and make changes as he saw fit.
Taylor played it cool. “Send the offer,” he told Musk. Twitter would give it a fair consideration and get back to him. That was all Taylor could commit to, and he refused to be sucked into a debate about the qualifications of current management. They ended the call with Musk directing any further questions to Birchall.
Musk had tapped Birchall’s network of Morgan Stanley bankers, and they had rallied to meet his demand for a quick acquisition of the social media company. For such a complex transaction, Musk’s letter, which was sent that evening, was shockingly brief, a mere 145 words. It was also a radical departure from the belated disclosure Musk filed with the SEC announcing his investment, in which he declared that he would remain a passive shareholder, not using his stake to sway the company. Everything had changed.
Bret Taylor
Chairman of the Board,
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.
However, 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.
As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.
Twitter has extraordinary potential. I will unlock it.
The letter was serious, but had a callback to Muskian lore. The price, $54.20, was a pothead reference and a callback to his 2018 attempt to take Tesla private. It would value Twitter at about $44 billion. Musk shared a laugh with Birchall over the weed reference, before settling in for the night with Boucher.
At 4:23 a.m. while hanging with the pop singer in his Vancouver hotel room, he tweeted a link to an SEC filing.
“I made an offer,” Musk wrote.
>>> Taylor called an emergency board meeting on Thursday morning, April 14. The discussion was sobering. Musk had accelerated rapidly from bizarre threats to what seemed to be—despite the trolling joke in his proposed price—a real offer to buy Twitter.
They needed to give Musk serious consideration, Taylor instructed. It was their duty to shareholders to weigh the offer carefully, especially because it represented a premium on Twitter’s current stock price. But it wasn’t clear to the directors that Musk’s offer was one of conviction, or if he might leave them twisting in the wind.
Twitter would need to fend him off, at least for a little while, the board decided. They had to survey other buyers and suss out whether another competitive bid was possible. And even though Musk had firmly said he wouldn’t negotiate, he was the richest man in the world. Maybe they could squeeze him.
They also decided that Taylor, Lane Fox, and Pichette should be responsible for managing the deal-making with Musk on a special transaction committee. Each of them were independent directors, without the same biases and ties to the company as Agrawal. And none of them had had extensive previous dealings with Musk like Durban, who had consulted with Musk on his botched take-private of Tesla in 2018.
The board said publicly that it would “carefully review” Musk’s proposal. But privately, its members agreed to implement a “shareholder rights plan,” or a company defense better known as a “poison pill,” a tactic developed by company boards in the 1980s to shield themselves from the corporate raiders. A poison pill would mean flooding the market with new Twitter shares that existing shareholders would be able to buy at a steep discount. If implemented, the move would likely damage Twitter’s share price by increasing the supply of outstanding shares. But it would also make it incredibly expensive for Musk to keep buying up shares to accumulate a controlling position.
Musk’s offer was certainly a premium on Twitter’s share price, which, after recovering in recent weeks, hovered around $45. But many Wall Street analysts believed Twitter was worth far more—after all, its stock had been above $70 just a year earlier. The social media company could reach those heights again, some firms insisted, urging the Twitter board to seek a higher price from Musk.
While Twitter’s board huddled on a video call, Musk was on the move. He strode onto a glossy stage in Vancouver that morning, wearing a crisp white shirt beneath a black overcoat, plopped down in an armchair and pulled his ankle up across his knee, revealing shiny motorcycle boots. These would be his first public remarks about his Twitter offer, and the audience at TED sat with rapt attention.
“I do think this will be somewhat painful, and I’m actually not sure I’ll be able to acquire it,” he said to his interviewer.
In his discussions to join the board, Musk had talked with Agrawal about his concerns of free speech, content moderation, and the supposed liberal influence on internal decision-making. At the conference, he ratcheted up that rationale even further, positioning himself as Twitter’s savior. He didn’t care about the money. He was doing this to wrest control of the internet’s town square from its censorious overlords.
“This is just my strong, intuitive sense that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said. “I don’t care about the economics at all.”
Once he stepped off the TED stage, Musk upped the ante, goading the board with a tweet. “Taking Twitter private at $54.20 should be up to shareholders, not the board,” he wrote, hinting at his nuclear tender option.
>>> Inside Twitter, many employees were aghast. Could Musk really buy the company? What changes would he make?
But some cheered the idea. Musk had fans throughout Silicon Valley, and Twitter was certainly no exception. They celebrated the idea of a decisive leader. Others believed that Twitter had caved too easily to liberal ideals and lost sight of its moral mission—allowing all conversations to thrive.
Sensing their voices were not the majority, Musk’s internal cheerleaders broke away from the frenzied chatter in the company’s Slack channels and formed their own group, titled #I-Dissent. The name was a nod to their opposing views on Musk, and the channel quickly became a battleground. Employees bickered and went back and forth about the pros and cons of Musk buying the company.
The fear and anger brewed into a toxic stew and Agrawal scrambled to address his troops. He took a red-eye from Hawaii on the night of April 13—the same day he’d arrived in the islands—and landed back in the Bay Area early the next morning. Once on the ground, he called into the board meeting, then prepared for an emergency all-hands meeting with his workers, in front of whom the chaos was playing out publicly via frantic tweets.
To many tweeps, Musk was antithetical to the people-first, empathetic culture they had signed up for. Some tweeted jokes to mask their concerns, with one employee quipping that they had moved a therapy appointment to attend the Agrawal-led all-hands meeting. Others began updating their résumés. Later, one engineer would create a widely shared internal document titled “Reasons Not to Work for Elon Musk,” with two dozen bullet points of the billionaire’s character failings, among them his early COVID denial, extreme wealth, and online bullying.
The pushback about Musk’s purchase on internal chats was loud and furious. Employees clung to the news of other potential acquirers. Some workers made impassioned pleas for their bosses to reject Musk’s bid, while others glued themselves to their Twitter timelines and began a crash course in corporate finance. What was a poison pill and how would it work? Would it change the price of their own stock grants? What grounds could the board use to reject Musk’s offer, and what would it take to make another offer viable? Employees from around the world dialed in to the video meeting, which started at 2:05 p.m. in San Francisco.
Agrawal tried to rally them, telling them he believed “everything would work out as it should.” His workers pressed him to say more about the deal and asked why he hadn’t been more transparent with them when Musk first started buying up stock in the company.
“This provides all of us with this moment where we feel distracted, where we feel a loss of control,” Agrawal told employees. “I am personally going to spend my time focusing on things I can control, and I believe it will matter.”
One employee said Musk had placed them in a hostage situation, essentially cornering the company’s management into selling Twitter.
“I don’t believe we are being held hostage,” Agrawal said to them all.
The comment didn’t instill confidence. Twitter’s staff wanted leadership. Some wondered why Agrawal didn’t use his Twitter account to fight back while Musk bashed them. It was the kind of thing they could have counted on Dorsey to do. Trying to encourage calm, Agrawal seemed rigid and his answers rehearsed, as if he was reading off a script.
“I believe Twitter stands for way more than one human, any human, me or anyone else, and their values. Twitter stands for open, public conversation,” Agrawal said. “It is best defined by everyone who uses the service.”
Given his answers, some employees thought Agrawal was already resigned to the outcome. He told them to ignore the noise Musk was making and focus on their jobs, since that was the only thing within their control, and that he would do the same.
What did he just say? Employees frantically messaged each other. Was their chief executive really just going to bury his head in the sand while the richest man in the world lambasted them on Twitter?
It wasn’t Agrawal’s first testy all-hands with employees, but it left many wanting more. Dorsey, for all his faults, projected stability and knew how to wield his influence. Agrawal seemed unprepared for the battle ahead.