Connect with us


Elon Musk reignites interest in buying Twitter through a letter



0 0

Image source: CNN

On Monday, Elon Musk surprised the world when he sent a letter to Twitter saying he was going to follow through with his plan to buy the company.

The news was revealed in a securities filing on Tuesday, where he said he was buying the company at the originally agreed upon price of $54.20 per share.

The letter

Musk;s letter stated it would proceed with the acquisition on the original terms, pending receipt of the debt financing for the deal provided that the Delaware Chancery stayed the litigation over Musk’s initial attempt to pull out of the deal and suspend the trial over the dispute.

A Twitter spokesperson confirmed that they received Musk’s letter, reiterating a previous statement that the company intends to close the transaction at $54.20 per share.

“Buying Twitter is an accelerant to creating X, the everything app,” Musk tweeted on Tuesday.

News of the letter first emerged on Tuesday with reports by Bloomberg.

Twitter stock

Twitter stock (TWTR) was halted twice, with the second halt occurring for the news pending.

However, after the stock resumed trading, TWTR was up by more than 20%, topping $51 a share.

The stock also inched closer to the deal price for the first time in months.

Read also: Elon Musk Voices YouTube Frustration With a Spongebob Meme on Twitter

The trial and Musk’s messages

News of Elon Musk’s letter emerged amid the two sides’ preparation to head to trial in two weeks over his attempt to terminate the $44 million acquisition agreement.

Twitter initially sued Musk to complete the acquisition.

Parag Agrawal, the CEO of twitter, was set to be deposed by Musk’s lawyers on Monday with Twitter’s lawyers initially planning to depose Musk on Thursday.

The letter also follows the release of Musk’s personal text messages about the deal on Friday.

The messages shed a light on a number of Silicon Valley insiders and billionaires who reached out to him to weigh in on the deal.

They also offered financing for the deal.

What the acquisition could mean

The agreement could conclude the contentious, months-long back and forth between Elon Musk and Twitter.

Through the months, uncertainty clouded employees, investors, and users of Twitter.

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, the Twitter board will likely agree to move forward with closing 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 Columbia Law School professor, believes that Twitter might not want to halt the litigation until the deal is officially closed.

He suggested that Twitter might want to proceed with the litigation process while negotiating with Musk in case his offer falls through 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.

Read also: Twitter Sells Platform for $44 Billion to Elon Musk

The Elon Musk-Twitter saga

The saga between the Tesla CEO and social media platform started in April when Musk revealed that he became Twitter’s largest shareholder.

In the following months, he accepted and later backed out of an offer to sit on the Twitter board.

Musk later threatened a hostile takeover of the company and signed an agreement to buy Twitter.

After raising concerns about bots on the platform, Musk attempted to terminate the agreement.

His action prompted Twitter to sue him to follow through with the deal, adding claims from a Twitter whistleblower to his argument.

Elon Musk initially sought to terminate the deal, claiming the company misstated the number of spam and fake bot accounts on Twitter.

Meanwhile, the company claimed he breached the deal and used bots as a pretext to get out of a deal after getting buyer’s remorse over the broader market decline.

Throughout the saga, Twitter maintained that it planned to push for the deal at the price and terms agreed upon months prior.

Legal experts have tipped Twitter to have the stronger argument heading into court, saying Musk is tasked with a significant burden of proving the company made misleading statements in its securities filing or the deal contract.

The lawsuit was the final nuisance in the way of getting the deal closed after Twitter shareholders voted to approve the deal last month.

The deal was initially going to close this month.

The saga today

As news emerges of the deal potentially closing, the attention will turn on what Musk’s control could mean for Twitter.

He previously suggested a series of changes, including returning Donald Trump’s account and removing permanent account bans.

Musk also indicated that he wanted to make the platform more open to “free speech” and could change the content moderation policies.

Twitter employees also raised concerns over the Musk takeover, focusing on benefits like remote working and parental leave.