Elon Musk’s $44 billion takeover bid for Twitter moved closer to a vote on Tuesday, which could set the stage for the deal to go forward.
In a filing with the Securities and Exchange Commission, the San Francisco-based company’s board advised shareholders to approve the deal Musk first offered in April.
If given the green light, stakeholders will receive $54.20 for each common share of the company, which is a significant premium to the $39.31 share price that Twitter traded at before Musk does not reveal his purchase of a 9% stake in the company.
Twitter shares on Tuesday morning were selling at $37.82.
Musk’s proposed acquisition of the social media platform has seen a number of ups and downs over the past two months. Musk, currently the richest person on the planet and owner of several high-flying companies including Tesla and SpaceX, accused Twitter of being less than clear about the number of robot accounts on the social media platform. He hinted the case could throw a wrench in buyout plans.
Twitter claimed that these automated accounts, which produce scheduled and pre-written posts, represent only about 5% of the site’s 229 million monetizable daily active users. This “monetizable” distinction means that these users are people and organizations who can see advertisements on the platform.
The question is central to how Twitter makes money. The advertisements, which generate revenue for the company, are served to its millions of users every day. Advertisers are looking for users to interact with – and hopefully spend money with – based on these advertisements.
Musk said he plans to step up the company’s profitability efforts if the acquisition is successful.
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