Billionaire Elon Musk has agreed to follow through with a deal to buy Twitter at the original price, the company disclosed Tuesday, causing Twitter shares to skyrocket and possibly ending a seven-month legal saga just two weeks before the world’s wealthiest man and the social media company were set to meet in court.
Here are some key facts
Musk offered to purchase Twitter for $54.20 a share or $44 billion. That’s the same price he had agreed to in April.
The brief 177-word note said Musk is willing to move forward with the deal provided there is an immediate stay on Twitter’s lawsuit to push the purchase through ahead of the five-day trial in Delaware slated to begin October 17.
Twitter shares rose 12.7%, to $47.93, after Bloomberg reported the letter. However trading was stopped shortly after 12 pm. ET because of pending news.
The stock later surged to $52.02—just below Musk’s agreed-upon purchase price—after trading resumed shortly before the market close, a 22.3% daily rise that brought the share price to its highest level since last November.
The company’s intends to “close the transaction at $54.20 per share,” Twitter spokesperson Brenden Lee wrote to SME, in a statement mirroring the company’s prior comments on Musk’s hesitation.
The Key Background
Twitter accepted Musk’s unsolicited takeover bid on April 25, three weeks after the billionaire disclosed he purchased a 9.2% stake in the company. Musk, a vocal opponent of the platform’s content moderation policy, quickly began to express cold feet and said he had concerns about the number of fake and spam accounts on the site, or bots. He requested the cancellation of the agreement July 8th, claiming that Twitter had misrepresented the number and quality of bot accounts. Four days later, Twitter sued Musk and claimed that his reasons for withdrawing from the agreement were invalid. A Delaware state court was ordered by the company to order Musk to purchase Twitter according to the terms originally agreed upon. This set the scene for the high-stakes trial that will take place later in the month. More revelations were made about Musk and Twitter as the trial date approached. Musk’s lawyers suggested last month his case was bolstered by a whistleblower complaint from Twitter’s former head of security, who alleged the company knowingly misled regulators and investors about the number of bots on the site. And last week, hundreds of Musk’s texts with celebrities like Twitter cofounder Jack Dorsey, controversial podcaster Joe Rogan and Gov. Ron DeSantis (R-Fl.) As part of the suit, they were revealed.
Musk’s estimated worth is $236 billion. He has the biggest fortune of any person by over $80 billion due to his investments in Tesla and SpaceX.
Tesla shares plunged about 5% within an hour of the release, reducing gains made earlier in the day before rebounding to 2.4%. The shares of Tesla fell about 20% amid a modest decline in the broad market.
“This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another,” Wedbush analyst Dan Ives wrote in a note to clients Tuesday.
Musk Offers to Buy Twitter at a Original Price of $54.20 per Share (Bloomberg).
Officially, Twitter sharesholders accept Musk’s $44 billion offer he’s desperate to get out of (SME)
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