Musk’s Shocking Offer Has Twitter Exploding

Another Day in REIT Paradise

We can’t start off today without mentioning Elon Musk. At 7:23 a.m. ET, he sent out the below tweet. 

The link he provided takes you to an SEC filing that contains the following message:

Bret Taylor

Chairman of the Board,

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. 

However, 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.

 As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.

Twitter has extraordinary potential. I will unlock it.

Elon Musk

This is no small news. At $54.20 per share, the total offer comes to about $43 billion. 

According to CNBC, “Twitter shares were up about 4% Thursday morning after closing at $45.85 a share on Wednesday.”

Meanwhile, the reaction from both supporters and haters is exploding right now. A presumed current Twitter staff member tweeted that he will quit if Musk takes over—to which Musk’s supporters began bidding the poster goodbye and good riddance (in much more colorful language). 

Now to be fair, there is colorful language on both sides. As many people know, Twitter does not cater to polite society conversations. But I digress…

Whatever side you find yourself on, you have to admit that the move was well-played from a business standpoint. 

When Musk’s largest shareholder position first became public, Twitter stock rose more than 27%. And Musk’s offer is well above its current value at $37 billion, according to Bloomberg.

So what happens next? I’m sure we will find out very soon. 

The World According to REITs

In other news, I promised a deeper dive into the recent Consumer Price Index (CPI) report… what I think is happening based on Mr. Market’s reaction… and, more importantly, how it relates to REITs. 

As a recap, I wrote yesterday how the latest CPI report, released earlier this week, highlights how inflation hit a “40-year high”… and rose “8.5% in March.”

It’s important to note that some types of leases factor in changes to the CPI (i.e., as the CPI rises, rent can also rise.)

I’m bullish on these types of properties, as they allow investors to benefit from a rising CPI—thereby defending them against inflation.

Finally, there is some breaking REIT news this morning. Innovative Industrial Properties, Inc. (IIPR) “closed the acquisition of a Maryland property comprising approximately 84,000 square feet of industrial and greenhouse space” for $25 million, according to Benzinga.com. President and CEO Paul Smither announced: 

We are thrilled to introduce District Cannabis to our tenant roster, a company that has truly distinguished itself in Maryland for its premium product quality and focus on sustainable cultivation techniques.

I interviewed Smithers and CFO Catherine Hastings on March 3, 2022. 

Here is one highlight:

Brad Thomas: 

I want to start a question at the top of my mind—I get this a lot from our audience, especially with the selloff we’ve seen,  not necessarily with Innovative Industrial, but just across the entire cannabis sector. It seems extremely volatile now. So what are you seeing out there? You had some really good earnings in the fourth quarter and in 2021, so what’s causing [shares to fall]?

Paul Smithers: 

Yeah, that’s a question, of course, we get all the time, too. And we certainly share the frustration with many of our shareholders that ask us, ‘What the heck’s going on?’ I wish we had a definitive answer. We don’t. One thing we do point to, I think, is there was a big runup in the space following the elections in 2020, and especially the runoffs in Georgia in January, when the Democrats took all three houses. There was a lot of thought, I think, [that] there was going to be some significant federal reform that was going to be imminent. And that fueled a lot of fire. And we saw a lot of stocks run up and the industry was pretty euphoric. Three or four months after that, they figured out that it’s not going to happen like that, that Washington is going to do what Washington does.

So I think from some of those highs, we saw some selloffs, and I watch our stock trade and it really seems to be trading to some degree with the general index[es]—the Dow, the S&P, Nasdaq—that of course have been tremendously volatile, especially now with what’s going on in Ukraine.

So I point to what I think we’re doing right. And as you mentioned, I think we put up some pretty impressive numbers for our fourth quarter, and I’m just going to do what we do … stay focused on performing and trying to do the best for our shareholders. And we’re just still focused on that model, raising capital, investing it at very creative yields. And that’s our future, and we’re going to keep doing it.

Until tomorrow!

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