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Elon Musk to Buy Twitter: Sides Agree to Close at Original $44 Billion Price

Musk had overnighted a letter agreeing to go ahead with the sale at $54.20 per share, and Twitter agreed

UPDATE: Twitter has agreed with Elon Musk’s proposal to close a sale at their original $54.20-per-share price, which values the company at $44 billion.

The agreement came on the brink of a legal battle between the billionaire Tesla founder and Twitter, who have been wrangling and tangling since Musk first winked at the idea of acquiring the social media giant early this year. With an Oct. 17 trial date looming and Musk scheduled for deposition later this week, he overnighted a letter to Twitter suggesting they go ahead with the same terms negotiated over the summer.

Twitter, which took Musk to court to enforce those very terms, responded just a few hours later:

Twitter stock shot up 22% and was rising as the close of trading neared Monday. It started the day just under $43, then shot up 18% at news of Musk’s offer, to over $48. With Twitter confirming by midday that a deal was in hand, the stock rode a second rocket stage to $52, where it stood at market close.

Musk had not yet tweeted any reaction as of this update, though he did respond to the founder of Dogecoin’s tweet about government spending with a laughing face emoji.

Twitter’s board has already voted to approve the sale, and Musk has secured the funds. But a timeline for a formal close has multiple variables: First, a chancery court in Delaware must agree to dissolve their case, and any federal regulatory hurdles would then follow. But as Musk doesn’t control any similar media or tech businesses, a private sale could get whisked through those hurdles in a matter of days or weeks.

Though Musk plans to take Twitter private, he’s hardly shrouded his hopes and intentions for the platform. He’s spoken repeatedly about throwing back the curtains on the site’s algorithms and relaxing censorship, with exceptions for spam accounts and explicit calls for violence.

Previously …

After months of wrangling and on the brink of a legal battle, Elon Musk has proposed closing a deal to buy Twitter at his original offer price of $54.20 per share, multiple media outlets reported Tuesday.

Musk sent via overnight letter the concession, which would value the company at $44 billion, after weeks of trying to wriggle out of a deal under contract. Bloomberg News and The Washington Post each cited copies of the letter.

Musk agreed to purchase Twitter in April, but quickly retreated, saying he was misled about the amount of “bot” accounts on the social media platform. Twitter – resistant to sale at first, then unable to satisfy Musk’s inquiry – sought to enforce the purchase agreement in what was shaping up to be a court battle set to begin Oct. 17.

Presuming Twitter doesn’t change its mind again (and absent any underlying shenanigans), Musk’s willingness would clear the way for a transaction, pending any remaining regulatory clearance. Twitter is considering the proposal and will take at least a full day before responding – which speaks to the distrust that has mounted between the two sides – a person familiar with the situation told the Post.

However, the amount of thrashing about in the Musk-to-buy-Twitter deal certainly doesn’t speak to an imminent, or clean, resolution.

Twitter’s leadership and employees pitched an internal fit when the billionaire Tesla and Space X founder first expressed interest in a purchase, including his move to buy a 10% stake in the social platform, making him the largest shareholder. Musk has criticized the platform’s censorship policies, management and the authenticity of its user base from the get-go, and Twitter at first was publicly allergic to the idea of submitting to his influence.

But Twitter began warming up to Musk’s proposal as the board came to terms with the financials and met with Musk. Presumably not satisfied with the degree of transparency around the percentage of “bot” accounts on the platform, Musk pulled out of the deal formally in July, saying terms had been violated.

With that, Twitter’s reversal was also complete.

The company, arguing that the mercurial billionaire used the bots issue as a screen for his buyer’s remorse, sought to enforce the contract in court, where lawyers for both sides have been plastering one another with subpoenas and arguments ever since. Both Twitter CEO Parag Agrawal and Musk were due in court for depositions this week.

Twitter shares were suspended Tuesday following the report after jumping more than 18%.