Image source: CNN
Elon Musk surprised the world on Monday when he sent a letter to Twitter saying he intends to follow through with his plan to buy the company.
The news was revealed in a securities filing on Tuesday, in which he stated his intention to buy the company at the originally agreed price of $ 54.20 per share.
Musk’s letter says the acquisition will follow the original terms, provided the Delaware law firm stays out of litigation over Musk’s first attempt to walk away from the deal and the lawsuit be suspended due to disputes.
A Twitter spokesperson confirmed receipt of Musk’s letter, repeating 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.
Shares of Twitter (TWTR) were closed twice, and the most recent halt was due to the pending news.
However, after the resumption of trading, TWTR rose more than 20% to over $51 per share.
The stock rose closer to the deal price for the first time in months.
The trial and Musk’s messages
News of Elon Musk’s letter surfaced as both sides prepared to appear in court within two weeks of his bid to end the $44 million acquisition deal.
Twitter initially sued Musk to finalize the acquisition.
Parag Agrawal, Twitter’s CEO, is said to have been deposed by Musk’s lawyers on Monday, while Twitter’s lawyers originally planned to depose Musk on Thursday.
The letter also follows the release of Musk’s personal text messages about the deal on Friday.
Reports indicated a number of Silicon Valley insiders and billionaires who had contacted him to discuss the deal.
They also offered to help by financing 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 workers, 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 will likely 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 drop the lawsuit until the deal is officially finalized.
He hinted that Twitter might want to continue the negotiation process with Musk if his bid failed 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 story between Tesla’s CEO and the social media platform began in April when Musk revealed that he had become Twitter’s largest shareholder.
In the following months, he accepted an offer to serve 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 get out of the deal, saying the company had misrepresented the number of spam and bot accounts on Twitter.
Meanwhile, the company said it violated the deal and used bots as an excuse to get out of a deal after the buyer complained about the general market downturn.
Throughout the saga, Twitter maintained that it intended to enforce the price and terms agreed months earlier.
Legal experts have suggested that Twitter is taking the strongest case to court, saying Musk has the tough job of proving that the company made misleading claims in the stock request 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 expire this month.
The saga today
He had previously suggested a number of changes, including the restoration of Donald Trump’s account and removing the protocol of permanent account bans.
Musk also hinted that he wants to make the platform more open to “free speech” and may want to change content moderation policies.
Twitter officials also expressed concern over Musk’s acquisition, focusing on perks like remote work and parental leave.