Elon Musk wants to return to Twitter, and Twitter is a game. Tesla’s billionaire CEO has proposed buying the company at the originally agreed price of $44 billion, bringing the month-long saga one step closer to concluding.
Musk made the surprising change not on Twitter, as has been his custom, but in a letter to Twitter that the company disclosed in a filing Tuesday with the US Securities and Exchange Commission.
It came less than two weeks before a trial between the two sides is set to begin over Musk’s attempt to back out of the Delaware deal. Musk also faced a scheduled deposition from Twitter’s lawyers beginning Thursday.
In response, Twitter said it intends to close the transaction at $54.20 per share after receiving Musk’s letter. But the company stopped short of saying it will drop the lawsuit against the billionaire Tesla CEO. Experts said that makes sense given the contentious relationship and lack of trust between the two sides.
“I don’t think Twitter will waive their trial date just because of Musk’s word; will need more certainty about the shutdown,” said Andrew Jennings, a professor at Brooklyn Law School, noting that the company may also be concerned about Musk’s proposal. a delaying tactic. After all, he has already tried unsuccessfully to postpone the trial twice.
Twitter stock trading, which had been halted for much of the day pending the release of the news, resumed Tuesday night and soared 22% to close at $52.
But even if the deal now goes smoothly, it’s too early to call Twitter a win, said Jasmine Enberg, an analyst at Insider Intelligence.
“The deal will resolve some of the near-term uncertainty at the company, but Twitter is essentially in the same place it was in April,” he said. “There is still a lot of uncertainty about what Musk intends to do with Twitter, as well as about the future of a company with a leader who has wavered on his commitment to buy it. And if we’ve learned anything from this saga, it’s that Musk is unpredictable and he’s not done yet.”
Musk’s proposal is the latest twist in a high-profile saga involving the world’s richest man and one of the most influential social media platforms. Much of the drama has played out on Twitter, with Musk, who has more than 100 million followers, lamenting that the company was not living up to its potential as a platform for free speech and had too many bots.
While some logistical and legal hurdles remain, Musk could be in charge of Twitter in a matter of days, no matter how long it takes him and his co-investors to raise the cash, said Ann Lipton, an associate professor of law at Tulane University. .
A letter from Musk’s attorney dated Monday and disclosed by Twitter in a securities filing said Musk would close the merger signed in April, provided the Delaware Court of Chancery “hands down an immediate stay” of Twitter’s lawsuit against him. and postpone the trial scheduled to begin in October. 17.
Musk’s attorneys did not respond to requests for comment Tuesday.
Musk has been trying to back out of the deal for several months after signing to buy the San Francisco company in April. Shareholders have already approved the sale, and legal experts say Musk faced a major challenge defending himself against Twitter’s lawsuit, which was filed in July.
Eric Talley, a law professor at Columbia University, said he’s not surprised by Musk’s change of course.
“On the legal merits, his case didn’t seem that strong,” Talley said. “It seemed like a pretty simple case of buyer’s remorse.”
Musk claimed that Twitter underestimated the number of fake accounts on its platform, and Twitter sued when Musk announced the deal was off.
Musk’s argument was largely based on the charge that Twitter misrepresented the way it measures the magnitude of “spam bot” accounts that are useless to advertisers. Most legal experts believe he faced an uphill battle convincing Chancellor Kathaleen St. Jude McCormick, the court’s chief judge, that something has changed since the April merger deal that warrants rescinding the deal.
Musk remained silent about the turn of events on Twitter until Tuesday afternoon, when he tweeted that “Buying Twitter is an accelerator to create X, the everything app” without further explanation.