by Elon Musk sent an offer on Twitter saying he’s willing to go ahead with buying the company at the initial price of $44 billion, according to a letter from Musk’s lawyer filed Tuesday with the Securities and Exchange Commission.
The news, first reported by Bloomberg, sent Twitter shares up as much as 22% on Tuesday after an hours-long trading halt. Musk was not immediately available for comment.
The deal will move forward if the Delaware court hearing Twitter’s lawsuit against Musk immediately dismisses the case, Musk said in his proposal on Twitter on Monday.
Twitter said in a statement: “We have received the letter from the Musk parties that have filed with the Securities and Exchange Commission. The Company’s intention is to close the transaction at $54.20 per share.”
The proposal could end a months-long saga between the two sides that included a lawsuit scheduled to go to trial in a month in Delaware court.
“This is a clear sign that Musk recognized heading into Delaware Court that the chances of us winning against the Twitter board were very unlikely and this $44 billion deal was going to go through one way or another.” Dan Ives of Wedbush Securities said in a note. to customers on the Tuesday following the report.
The uncertainty has weighed on some Twitter employees.
“At this point, it’s just do it or don’t do it,” a Twitter employee told NBC News on condition of anonymity because they were not authorized to speak publicly.
Rumman Chowdhury, Twitter’s director of ethics, transparency and accountability in machine learning, tweeted similar frustrations.
“Living the succession plot is exhausting——-,” he said he tweetedreferring to the popular HBO show.
Musk first showed interest in Twitter in early April when he revealed he had become the company’s largest public shareholder. he was also set to take a seat on the social media platform’s board of directors.
At the time, Musk’s stated reason for going after the company was to ensure it would “comply with principles of free speech.” He also expressed interest in bringing former President Donald Trump back to the platform.
Musk’s involvement in the social networking platform was endorsed by Twitter co-founder and former CEO Jack Dorsey, who said Musk could take the company “behind Wall Street.”
“I trust his mission to expand the light of consciousness,” Dorsey tweeted.
Shortly thereafter, Musk decided that he would buy Twitter outright and take it private. On April 14, it offered $54.20 per share, or about $44 billion. At first, Twitter resisted, adopting a so-called “poison pill” policy that would have reduced the price of its shares if Musk attempted to buy even more of them on the open market. In addition to questions about how Musk would change the platform, some analysts considered Musk’s price too cheap.
Shares of other tech companies then began a steady decline alongside volatility in the broader market. Meanwhile, Musk has secured firm commitments from Wall Street lenders and other investors to finance the deal. By April 25, Twitter decided to reverse course and accept Musk’s offer. Twitter and Musk issued a joint statement that day praising the deal, with Musk proclaiming, “Twitter has enormous potential – I look forward to working with the company and the user community to unlock it.”
But about three weeks later, Musk suddenly announced in a tweet that the deal was “on hold” pending further investigation into how many users were real versus fake or spam accounts. On June 6, Musk accused Twitter of breaching the agreement by allegedly refusing to respond to requests for additional information about the spam account issue and seeking to terminate the agreement.
Twitter responded that the accusation was false and that it intended to close the deal the two companies had signed.
Unable to deal with the impasse, Twitter sued Musk in Delaware court – the main venue for US corporate litigation – on July 12 to force the transaction.
“Having made a public spectacle of putting Twitter in the game, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that — unlike any other party bound by Delaware contract law – he is free to change his mind. company, disrupt its operations, destroy shareholder value and walk away,” Twitter said in its complaint.
Musk argued that Twitter’s long-standing estimate that less than 5% of its accounts were fake appeared to be inaccurate and was the reason for the deal to be terminated. He eventually filed a countersuit accusing the company of fraud, a charge Twitter denied.
This set the stage for the October trial. Since then, the sides have gone back and forth on the parameters of the showdown, including the date itself and the type of documents and communications that could be requested and produced.
A further complication was added when a whistleblower came forward to accuse Twitter of security lapses – a charge Musk then tried to include in his evidence against the company. Twitter tried to fend off this development, but ultimately failed.
Musk, in turn, failed to delay the trial.
