Elon Musk Offers to Take Over Twitter for $43 Billion

Elon Musk offered a $43 billion takeover bid for Twitter on April 14, 2022. Namely, he offered $54.20 per share. At a TED2022 conference on Thursday, Musk announced the proposed deal in a filing with the US Securities and Exchange Commission after turning down the opportunity to join the company’s board of directors. Elon Musk, who also owns Tesla Inc., disclosed a 9% stake in Twitter, making him the largest individual investor. He also mentioned that he had a “Plan B” if his Twitter bid was declined. Meanwhile, he may reconsider his position as a shareholder if his takeover bid is not accepted. 

Musk said, “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.”

Musk sees the platform as an essential networking service for free speech, and he considers he is the right person who can unlock Twitter’s potential growth. He believes Twitter should be more open to everyone. 

Twitter executive members confirmed that they had received an “unsolicited, nonbinding proposal” from Musk and stated that the Board of Directors would carefully review the proposal.  

Musk’s Offer to Buy Twitter Didn’t Seem Appealing at First

Although Musk considers his offer is the best and final, there are some critics raised. According to Adam Crisafulli, the $54.20 per share is too low as the company’s share hit $70 less than a year ago. Furthermore, Twitter shareholder Saudi Prince Alwaleed bin Talal said he rejects Musk’s offer; because he thinks the offer is not close to its intrinsic value given its prospect growth.

On Friday (15/4), the board announced that it had adopted a poison pill measure, allowing them to sell stock and dilute Musk’s ownership. It’s a sign that the board isn’t interested in Musk’s proposal. Musk said he wouldn’t make another offer (although he might change his mind). On the other hand, Twitter may choose another buyer it deems more suitable.

Elon Musk is the richest person globally and ranks first with a net worth of $ 252 billion according to the Bloomberg Billionaires Index. He is a well-known billionaire-entrepreneur, CEO of electric car company Tesla and at his space company SpaceX. However, some analysts are curious if his liquid assets are enough to buy Twitter because Musk attached most of his to his companies.

Is Twitter Stock halal?

Although there has been a lot of news circulating about Elon Musk and his proposal to take over Twitter this week, there has been no mention of the halal status of Twitter shares. As stated by Musk, Twitter is a platform that supports free speech, but is Twitter’s business activities in accordance with Shariah principles?

For Muslim investors, knowing the sharia status of a stock is important instead of following market trends and sentiments. Therefore, let’s find out whether the Twitter share is halal or not.
Twitter products and services include Twitter, Promoted Ads, Twitter Amplify, Follower Ads, and Twitter Takeover. According to Musaffa Halal stock screener, Twitter has non-sharia compliant revenue of 0.70%. However, Twitter’s questionable revenue is 84.74% of its total revenue. Twitter’s questionable revenue comes from advertising services if we explore it further. According to the AAOIFI halal stock screening standards, non-halal revenue should not be more than 5% of total revenue to be Shariah-compliant.

Next, we will evaluate the results of Twitter’s financial screening. Twitter has interest-bearing securities and assets and interest-bearing debt of less than 30% of its market capitalization, 18.09%, and 12.03%, respectively.

Even though the financial screening results meet the Halal stock criteria, most of Twitter’s income comes from questionable sources. Therefore, according to Musaffa halal stock screener, the shariah compliant status of the Twitter stock is “Avoid.”
We suggest Muslim investors not to invest in this stock and avoid it.

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