Mark Cuban has revealed his theory as to why Elon Musk has offered to purchase Twitter for a staggering $41 billion.
Yesterday, Reuters reported that the Tesla founder - who last month purchased a 9.2% stake in the social media company (TWTR.N) for $2.89 billion (£2.20bn) - had submitted an offer for the globally popular social media site, offering $41 billion in cash.
The billionaire's offer reflects a $54.20 per share price - which was disclosed in a regulatory US SEC (Securities and Exchange Commission) filing on Thursday (April 14) - and represents a 38% premium to the closing price of Twitter's stock April 1 close.
In a letter to Twitter Chairman Bret Taylor, Musk said:
"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."
Referring to his near 10% investment last month, the Tesla CEO added in his letter to Taylor: "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."
"Twitter has extraordinary potential. I will unlock it," Musk added.
Now, 63-year-old fellow billionaire Mark Cuban has shared his thoughts on Musk's proposition, and his thoughts on the eye-watering offer.
On Thursday, the Shark Tank star tweeted: "My conclusion, @elonmusk is f***ing with the SEC. His filing w/the SEC allows him to say he wants to take a company private for $54.20 Vs his 'Am considering taking Tesla private at $420. Funding secured'.
"Price go up. His shares get sold. Profit [up]. SEC like WTF just happened."
Per the New York Post, Cuban was referring to a 2018 tweet made by Musk, in which, the SpaceX founder declared that he had 'funding secured' to take Tesla private at $420 per share.
The tweet led to the SEC accusing Musk of making "false and misleading" statements about the company's finances.
At the time, Steven Peikin, co-director of enforcement at the SEC, said: "We allege that Musk had arrived at the price of $420 by assuming a 20 percent premium of what Tesla’s then existing share price [was], and then rounding up to $420 because of the significance of that number in marijuana culture, and his belief that his girlfriend would be amused by it."
Cuban added in subsequent tweets that as a result of Musk's offer, "every major tech company" - including Google and Facebook - were "on the phone with their anti trust lawyers asking if they can buy Twitter and get it approved. And Twitter is on the phone with their lawyers asking which can be their white knight."
But Cuban did say that he believes Twitter will "do everything possible not to sell the company".
"They will try to get a friendly to come in and buy Elon's shares and get him out," he tweeted.
