Image source: CNN
On Monday, Elon Musk surprised the world when he sent a letter to Twitter saying he would carry out his plan to buy the company.
The news was revealed in a securities filing Tuesday, in which he claimed he was buying the company at the originally agreed price of $54.20 per share.
Musk’s letter says the acquisition will proceed on original terms pending the receipt of debt financing for the deal, provided the Delaware Chancellery suspends litigation regarding Musk’s initial attempt to pull out of the deal and the process is suspended due to the dispute.
A Twitter spokesperson confirmed receipt of Musk’s letter and reiterated an earlier statement that the company intended to complete the transaction at a price of $54.20 per share.
“Buying Twitter is an accelerant to creating X, the everything app,” Musk tweeted on Tuesday.
News of the letter first surfaced on Tuesday, with reports from Bloomberg.
Twitter stock (TWTR) has been halted twice, with the second halt happening because of the upcoming news.
However, after trading resumed, TWTR jumped more than 20% to top $51 per share.
The stock approached the deal price for the first time in months.
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The trial and Musk’s messages
News of Elon Musk’s letter surfaced as the two sides prepared to appear in court in two weeks for his attempt to terminate the $ 44 million acquisition deal.
Twitter initially sued Musk to finalize the acquisition.
Parag Agrawal, the Twitter CEO, was reportedly deposed by Musk’s attorneys on Monday, while Twitter’s attorneys initially planned to depose Musk on Thursday.
The letter also follows the release of Musk’s personal text messages about the deal on Friday.
The reports shed light on a number of Silicon Valley insiders and billionaires who have contacted him to discuss the deal.
They also offered to provide funding for the deal.
What the acquisition could mean
The deal could end the controversial back and forth of months between Elon Musk and Twitter.
Over the months, uncertainty has clouded employees, investors, and Twitter users.
It is now up to the social media platform to determine how to respond to the proposal.
According to Josh White, assistant professor of finance at Vanderbilt University, Twitter’s board of directors is likely to accept the deal.
“The very public saga has certainly taken a toll on them and Twitter employees,” said White.
“It is best for all parties to finish the deal and make a quick and seamless transition. I suspect it will close quickly.”
Eric Tally, a professor at Columbia Law School, believes Twitter won’t stop the lawsuit until the deal is officially closed.
He hinted that Twitter may want to continue the process during negotiations with Musk in case his offer fails again.
“Twitter is probably going to say, ‘look, we definitely want to engage you on this… But we’ve still got a trial on Oct 17, and until this is signed, sealed, and delivered, we’ve got to get ready for trial,’” said Talley.
The Elon Musk-Twitter saga
The saga between Tesla’s CEO and the social media platform began in April when Musk revealed he was becoming Twitter’s largest shareholder.
Over the next few months, he accepted an offer to sit on Twitter’s board of directors and later retired.
Musk later threatened a hostile takeover of the company and signed a deal to take over Twitter.
After raising concerns about bots on the platform, Musk sought to end the deal.
His action prompted Twitter to sue him for closing the deal, adding claims from a Twitter whistleblower to his argument.
Elon Musk initially tried to end the deal, saying the company misrepresented the number of spam and fake bot accounts on Twitter.
Meanwhile, the company claimed it violated the agreement and used bots as an excuse to back out of a deal after receiving buyer’s remorse over the general market downturn.
Throughout the saga, Twitter continued to insist that it intended to force the deal on the price and terms agreed months earlier.
Legal experts have suggested that Twitter take the strongest argument to court, saying Musk has the tough job of proving that the company made misleading claims in the stock filing or purchase agreement.
The lawsuit was the latest obstacle to closing the deal after Twitter shareholders voted to approve the deal last month.
The deal was originally supposed to end this month.
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The saga today
As news of the potential conclusion of the deal emerges, attention will turn to what Musk’s control could mean for Twitter.
He previously proposed a number of changes, including bringing Donald Trump’s account back and removing permanent account bans.
Musk also hinted that he wants to make the platform more open to “free speech” and may change the content moderation policy.
Twitter officials have also raised concerns about Musk’s acquisition, focusing on benefits such as remote work and parental leave.
In major reversal, Elon Musk again proposes buying Twitter at full price