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According to the document, former CEO Jack Dorsey assured Musk that as a private firm, Twitter will be better able to focus on execution.
A new filing with the Securities and Exchange Commission provides insight on the Twitter board's early discussions with billionaire Elon Musk as he considered joining the board, only to forsake that idea and attempt to take over the firm.
The board eventually decided to sell to Musk for $44 billion, though Musk has claimed the sale is on hold while he investigates the platform's spam and bot accounts.
Beginning on March 26, when Musk reached out to former CEO Jack Dorsey "to discuss the future direction of social media," the document exposes a timeline of talks from Twitter's perspective in the run-up to the acquisition. Musk also contacted Twitter board member Egon Durban on the same day, and the two talked about Musk joining the board.
Musk discussed his interest in Twitter with Twitter board Chair Bret Taylor and CEO Parag Agrawal the next day, indicating he was thinking about joining the board, trying to take Twitter private, or creating a competitor.
Following talks with Musk that included lawyers and bankers, the board agreed that Musk would join the board in early April, subject to a background check and other standard procedures.
Musk contacted Dorsey on April 4 to inquire about his thoughts on Twitter. According to the document, Dorsey informed Musk that as a private firm, Twitter will be better able to focus on execution. Musk asked Dorsey whether he would continue on the board despite the fact that he was slated to leave, and Dorsey declined.
Musk's background check was finished shortly after that chat, and his appointment to the board was slated to take effect on April 9. Musk and Agrawal continued to discuss Twitter's business and products in the weeks leading up to that date, in preparation for his new post on the board. But, before the appointment took effect, Musk informed Taylor and Agrawal that he would no longer be joining the board of directors and would instead offer to take Twitter private.
This sparked a frantic few weeks, during which Musk made his "best and last" offer to buy Twitter for $54.20 per share. To dissuade Musk from pursuing a hostile acquisition, the board later enacted a so-called poison pill or shareholder rights plan. However, he then proposed a tender offer, in which he would directly appeal to shareholders in a takeover, which appeared to sway the Twitter board's decision to accept Musk's initial offer.
According to the filing, Twitter's board weighed its historical difficulty in growing the business, as well as the fact that other possible acquirers would be "unlikely" to be interested or able to buy Twitter due to regulatory, financial, and operational risks. They also judged Musk's initial offer to be "the highest value that Twitter could fairly receive" from him, and that Musk's first offer was likely "the best value that Twitter could possibly obtain" from him.
The board eventually consented to the agreement. Musk then revealed on May 5 that he was in talks with existing stockholders, including Dorsey, about maintaining equity in the amalgamated business. According to the document, Dorsey informed the company about these discussions and stated that he could own stock in the new company.
Since Musk's bid, Twitter's price has plummeted alongside the larger market, creating concerns among investors about whether the merger can still be completed. Musk mentioned that he would try to renegotiate the pricing in the future.
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