Elon Muskceo of Tesla and the richest man in the world once again surprised the markets. Tesla’s boss changed his mind again on Tuesday and announced that he would continue with the purchase of Twitter at the previously agreed price of $ 54.20 per share. The social media platform released a statement claiming that it had received the letter and stated: “Twitter’s intention is to close the transaction at $ 54.20 per share ”.
According to CNBC sources, the deal could come this Friday. On Tuesday, the Twitter stock was suspended at the beginning of the session for excess of the upside, following the news of the Tesla CEO’s plans to move forward with the acquisition. Twitter closed the session up 22% to $ 52 per share, thus bringing the price of the stock just above the purchase price proposed by Musk himself on April 25th. In pre-market trading, the Twitter stock is losing 0.6% after rebounding by 22%.
According to the SEC filing, Musk sent a letter to Twitter on Monday, notifying the company of his intention to proceed with the agreed transaction in April.
Here is the letter Musk’s attorney, Mike Ringler of Skadden Arps, sent to Twitter attorneys on October 3:
Musk later tweeted that “Buying Twitter is an accelerator to create X, the app of everything”. Musk said he wants Twitter to be more like TikTok and WeChat, with many more highly engaged users.
What happened between Musk and Twitter?
Recall that a few weeks after accepting the deal valuing Twitter at $ 44 billion, the eclectic entrepreneur attempted to retire, officially informing the company in July of his intentions to terminate the contract. As a result, Twitter is suing Musk to force him to go through with the purchase. The two parties were due to be tried in Delaware Chancery Court on October 17.
Until a few weeks ago Musk claimed that the real number of “bots” on the Twitter platform did not correspond to the numbers declared by the social platform. And so that was one of the reasons he was reneging on the deal. Musk and his lawyers said the social media company was misleading investors by providing fake numbers in company records with the Securities and Exchange Commission. Twitter countered, however, that Musk’s fraud claims were incorrect and based on a misunderstanding about how the company registers bots and fake accounts on the platform.
In addition, the richest man in the world also accused Twitter of failing to provide the necessary data related to spam and bots, which Twitter denied. In turn, the social media said that Musk was looking for a reason to withdraw from the deal when the company’s shares fell due to the large decline in the overall market.
Although Musk tried to delay the date of the trial, Delaware Chancellor Kathaleen McCormick denied the requests citing the possibility that Twitter would suffer “irreparable damage”. However, she allowed Musk and his he attorneys to amend their counterclaim to include some allegations from the former Twitter security chief in a separate lawsuit against the company.