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Musk Offers To Buy Twitter At Original Price, Sending Stock Soaring
Topline
Billionaire Elon Musk wrote to Twitter offering to follow through with a deal to buy the company at the originally agreed-upon price, multiple news outlets reported Tuesday, potentially ending a seven-month legal saga two weeks before the world’s wealthiest man and the social media company were set to meet in court.
Elon Musk seems to have made it through his purchase of Twitter after months of controversy.
The Key Facts
Musk offered to purchase Twitter for $54.20 a share or $44 billion. That’s the same price he signed in April. Wall Street Journal.
Musk and Twitter face-offs are scheduled for a 5-day trial beginning in Delaware on October 17, as Twitter aims to accelerate the sale.
Following the news, Twitter shares rose 12.7% and reached $47.93. Trading was then halted due to the pending news.
Twitter and Musk’s attorney Alex Spiro did not immediately respond to SME’ request for comment.
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. Musk requested that the deal be canceled on July 8. He claimed Twitter had reduced the number of bot accounts it lists in public filings. Twitter sued Musk shortly afterward and said that Musk’s reasons for pulling out of the deal weren’t valid. The Delaware State Court was forced by Twitter to make Musk buy Twitter on the original terms. It set the stage for an intense trial this month. There were more revelations regarding both Twitter and Musk as the trial date neared. 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.) them as part the suit.
SME Valuation
Musk’s estimated worth is $236 billion. He has the biggest fortune of any person by over $80 billion, thanks to his investments in Tesla and SpaceX.
Tangent
Tesla shares dropped about 5% an hour after the news report. This was in contrast to earlier gains. In April, Tesla shares fell 20% due to a smaller market drop.
The Crucial Quote
“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.
Additional Reading
Musk Proposes to Purchase Twitter For a $54.20 Per Share Original Offer (Bloomberg).
The Twitter Shareholders Accept Musk’s Offer of $44 Billion He Desperately Wants To Escape (SME)
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