Do you have a paper? Well, flip it like Elon Musk, the CEO and founder of Tesla (TSLA).
According to Lawrence Elbaum, co-head of Vinson & Elkins’ Shareholder Activism Practice, we are only getting at the start of a big wave. However, this is not the first time that this is being experienced. In the past, many billionaire activists have placed their bids for favorite companies.
We are About to See a lot More Bids for Top Companies
Earlier on in March 2022, Musk acquired a 9.2% stake in Twitter before hitting harder and throwing forward a deal to buy the entire platform. He indicated that Twitter should not be primarily reliant on ad sales and police content. These are only initial ideas from the future visionary.
Elbaum posited that we are about to start experiencing unsolicited bids for more companies that have been undervalued by market corrections. He further adds that he does not think that there will be many copycat activities, private equity funds, and high-net-worth persons who will come forth to use the method employed by Musk to pressure boards.
At first, Musk’s bid was considered like taking a poisoned pill, but Twitter embraced the bid when it crossed USD 46.5 billion, led by Morgan Stanley. It showed Musk was very serious about the acquisition.
Boards Must Always be Ready
Billionaires going for top companies is nothing new. Only that Musk made the quest and acquisition open and in a more activist way. Musk is now planning to improve Twitter, which is also the first trend after acquiring new companies.
- In 2013, Amazon founder Jeff Bezos, bought the Washington Post for USD 250 million. However, Bezos has been quiet to maintain the independence of the editorial company.
- In 2018, Marc Benioff (Chairman of Salesforce) and his wife Lynne Benioff bought TIME for USD 90 million.
“Boards always need to be prepared and on their toes… And that way, when (an unsolicited bidder) shows up … friendly or hostile, they engage …” expressed Elbaum.
Doge Surges 9% on Report that Musk is to Buy Twitter
When news broke that Musk has reached a deal with Twitter, Dogecoin (DOGE) shot up by 9%. The price rose to USD 0.14 from 0.12 in the early morning hours (Asian time) of 25th April 2022.
According to Tomer Nuni, the Kryptomon’s Chief Marketing Officer, the speculation is that advertisers will be able to make payments for ads with DOGE plus other uses on Twitter. The same thing is happening in Tesla, where people can buy merchandise with DOGE in Tesla’s online store.