Billionaire Elon Musk has agreed to follow through with a deal to buy Twitter at the original price, the company disclosed Tuesday.
The news caused Twitter shares to skyrocket and with the possibility of ending a seven-month legal saga just two weeks before the world’s wealthiest man and the social media company were set to meet in court.
Twitter accepted Musk’s unsolicited takeover bid on April 25, three weeks after the billionaire disclosed he purchased a 9.2% stake in the company. Musk, a vocal opponent of the platform’s content moderation policy, quickly began to express cold feet and said he had concerns about the number of fake and spam accounts on the site, or bots.
He formally requested out of the deal July 8, arguing Twitter has lowballed the number of bot accounts in its public filings. Twitter sued Musk four days later and argued his reasons for backing out of the deal were invalid.
The company pushed a state court in Delaware to force Musk to buy Twitter along the originally agreed-upon terms, setting the stage for a high-stakes trial later this month. As the trial date drew nearer, more revelations about both Twitter and Musk emerged.
Musk’s lawyers suggested last month his case was bolstered by a whistleblower complaint from Twitter’s former head of security, who alleged the company knowingly misled regulators and investors about the number of bots on the site.
And last week, hundreds of Musk’s texts with celebrities like Twitter cofounder Jack Dorsey, controversial podcaster Joe Rogan and Gov. Ron DeSantis (R-Fl.) were disclosed as part of the suit.
Forbes Valuation
We estimate Musk to be worth US$236 billion, the largest fortune in the world by more than $80 billion, largely due to his stakes in Tesla and SpaceX.
Tesla shares fell about 5% in the hour after the report, paring gains earlier in the day, before recovering to a 2.4% gain on the day. Shares of the electric vehicle maker dropped about 20% in April amid a more modest broad market decline.
“This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this US$44 billion deal was going to be completed one way or another,” Wedbush analyst Dan Ives wrote in a note to clients Tuesday.
This article was first published on forbes.com
Musk Proposes to Buy Twitter for Original Offer Price of $54.20 a Share (Bloomberg)
Twitter Shareholders Formally Accept Musk’s $44 Billion Offer He’s Desperately Trying To Get Out Of (Forbes)