Elon Musk Still Wants To Buy Twitter, Moving Ahead With Sale
Elon Musk is moving ahead with his planned purchase of Twitter and the deal will remain at the originally-offered share price.
Twitter stock is rising again following reports that Elon Musk is moving ahead with his $44 billion plan to buy the company. On Tuesday, October 4, the Associated Press stated that Musk had sent a letter to Twitter proposing to complete the deal at the originally agreed-upon price of $54.20 per share. This decision follows months of legal battles after Musk tried to back out of the deal originally signed in April.
A trial is set to begin on October 17 between Elon Musk and Twitter over Musk’s refusal to complete the original acquisition agreement. Depositions for the Delaware Chancery Court trial were set to begin this week. Neither Twitter nor Musk, nor their lawyers, responded to messages seeking comment on Tuesday.
The contentious battle began in April when Elon Musk became Twitter’s largest shareholder. After revealing this fact, Musk began to stir things up, first accepting and then backing out of an offer to join Twitter’s board. Over the next few months, he signed an agreement to buy the company but cited concerns over the number of fake bots on the platform as a reason to terminate the agreement.
Musk threatened to end his agreement to buy the company after Twitter refused to provide detailed information about the actual number of spam bot accounts allowed on the site. Twitter countered, saying that Elon Musk was only using the bots as an excuse to get out of the deal. Twitter speculated that Musk had gotten buyer’s remorse after the overall market decline impacted Tesla stock and Musk’s personal wealth.
On July 12, Twitter sued Musk to force him into completing the acquisition. Within days, Musk filed a countersuit, and on July 19, a Delaware judge said that the legal dispute would go to trial in October. In August, a former head of security at Twitter came forward as a whistleblower stating that the company had intentionally misled regulators regarding the fake accounts and its poor cybersecurity measures.
Twitter appears to have the upper hand in the lawsuit they filed in July. They are seeking “specific performance” of the original contract, meaning that Elon Musk has to complete the purchase at the original price. The contract includes a $1 billion breakup fee if the court determines that Musk is responsible for the deal falling through.
Wedbush analyst Dan Ives stated in a note to investors that Musk’s latest decision was evidence of a reality check on his odds of winning the case. “This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely,” he said. “Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario, and instead accepting this path and moving forward with the deal will save a massive legal headache.”
Going through with the acquisition would also relieve ongoing headaches for Twitter CEO Parag Agrawal and thousands of Twitter employees. This year’s back-and-forth battle between Twitter and Musk has also created an unsettling atmosphere of uncertainty for investors and Twitter users. However, if Elon Musk becomes the new owner of the social media platform, the user experience may change.
Musk had stated that his ownership of Twitter would make the platform more open to free speech. One way he plans to do this is by relaxing the platform’s current content moderation policies. He also suggested eliminating permanent account bans and restoring former President Donald Trump’s account.
