After Offering To Buyout Twitter For $43 Billion, Elon Faces Pushback From Saudis, 'How Much Of Twitter Does Kingdom Own', Asks Musk

Elon Musk has offered to take over Twitter for $48 billion.

Earlier this week, the billionaire rejected the offer of a board seat in the company. That move reportedly highlighted his bigger intentions given that becoming a board member would have limited his ownership in Twitter to a little below 15 per cent.

“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,” Musk’s letter to Twitter Chairman Bret Taylor read.

He added, “My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.”

Since Musk made the offer, the Chairman of Kingdom Holding Company, which is Saudi Arabia's diversified investment holding company, rejected his offer. 'Prince' Alwaleed Talal, who is the chairman of Kingdom Holding Company, rejected Musk's offer on Twitter.

Saudi Arabia's Kingdom Holding Company (KHC) owns 5.2 per cent stake of Twitter, making KHC one of the largest shareholder of Twitter.

It is worth stressing that Musk asks in his tweet 'how much of Twitter does the Kingdom (of Saudi Arabia) own, directly and indirectly?'. This is important because whilst how much of Twitter the Kingdom Holding Company owns is public, if the Kingdom owns more than 5.2 per cent under a different name isn't public.

One must note that the general population of Saudi Arabia is quite active on Twitter and the platform is used by the monarchy to target and suppress critics of the regime.

The Kingdom's stake in Twitter isn't just another investment. As of now, that is the time of this article's publication, Musk has his reply to the chairman of KHC as the pinned tweet on his profile.

He has also tweeted another poll asking if the decision to accept/reject his offer should be up to the shareholders or the board.

Musk is offering to pay $54.20 per share. From the perspective of fiduciary duty, the goal of a company is maximising the profit for its shareholders. It isn't unrealistic to consider that at $54.20, a lot of shareholders will want to sell their share.

Twitter is a big name but as a company it isn't that profitable, nor is it able to attract advertisers, which is the basic business model of how all these social media companies make money.

As such, Twitter holds a significant amount of influence and many entrenched power bases use it to wield their power. The coastal elites in America are one of the examples. They have an interest to ensure that the nature of Twitter doesn't change.

Although Musk may have secured financing for his bid, it isn't clear that he will succeed. This is something that Musk himself concedes.