The tumultuous saga of Elon Musk Twitter’s on-and-off buy took a turn towards a conclusion on Tuesday after Tesla’s mercurial CEO offered to buy the company at the originally agreed price of $44 billion..
Musk made the surprising turnaround not on Twitter, as was his custom, but in a letter to Twitter that the company disclosed Tuesday in a filing with the U.S. Securities and Exchange Commission. It happened less than two weeks before the scheduled start of a trial between the two sides in Delaware.
In response, Twitter said it intended to close the deal at $54.20 per share after receiving Musk’s letter. But the company refrained from saying it was dropping its lawsuit against Tesla’s billionaire CEO. Experts said it made sense given the contentious relationship and lack of trust between the two sides.
“I don’t think Twitter is going to drop its trial date on Musk’s word alone — it’s going to need more certainty about the shutdown,” Brooklyn Law School professor Andrew Jennings said, noting that the company could also worry about Musk’s proposal. a delaying tactic. After all, he has already tried to postpone the trial twice without success.
Trading in Twitter shares, which had been halted for much of the day awaiting the release of the news, resumed trading on Tuesday evening and climbed 22% to close at $52.
Musk’s proposal is the latest twist in a high-profile saga involving the richest man in the world and one of the most influential social media platforms. Much of the drama played out on Twitter itself, with Musk – who has over 100 million followers – lamenting that the company hasn’t lived up to its potential as a platform for the free speech and have too many bots.
Although some logistical and legal hurdles remain, Musk could be in charge of Twitter within days — however long it takes for him and his co-investors to line up the cash, Ann Lipton says , associate professor of law at Tulane University.
A letter from Musk’s attorney dated Monday and disclosed by Twitter in a securities filing said Musk would close the signed merger in April, provided the Delaware Chancery court “immediately stays” Twitter’s lawsuit. against him and adjourned the trial, which is due to begin in October. 17.
Eric Talley, a law professor at Columbia University, said he was not surprised by Musk’s reversal, especially ahead of a scheduled deposition of Musk by Twitter lawyers from Thursday that “doesn’t was not going to be pleasant”.
“On the legal merits, his case didn’t look so strong,” Talley said. “It looked like a pretty straightforward case of buyer’s remorse.”
Musk’s attorneys did not respond to requests for comment on Tuesday.
Musk has been trying to walk away from the deal for several months after signing to buy the San Francisco company in April. Shareholders have already approved the sale and legal experts say Musk faced a huge challenge defending against Twitter’s lawsuit, which was filed in July.
Musk claimed Twitter had underestimated the number of fake accounts on its platformand Twitter sued when Musk announced the deal was off.
Much of Musk’s argument hinged on the allegation that Twitter had misrepresented how it measures the magnitude of “spam bot” accounts that are useless to advertisers. Most legal experts believe he faced an uphill battle to convince Chancellor Kathaleen St. Jude McCormick, the court’s chief justice, that something has changed since the April merger deal that warrants the termination of the agreement.
Musk’s main argument for terminating the deal – that Twitter was misrepresenting how it measured its “bot spam” problem – also didn’t seem to go well because Twitter had worked to single out Musk’s attempts to bring in scientists from third-party data to reinforce its concerns.
Neither Musk nor Twitter CEO Parag Agrawal wrote anything about the deal on Twitter, where many developments in the dispute were broadcast. Many of Musk’s tweets in the past 24 hours were about a controversial proposal to end Russia’s invasion of Ukraine.angering Ukrainian President Volodymyr Zelenskyy.
Even though the deal now goes off without a hitch, it’s too early to call a win for Twitter, said Insider Intelligence analyst Jasmine Enberg.
“The deal will resolve some of the short-term uncertainty for the business, but Twitter is essentially where it was in April,” she said. “There is still a lot of uncertainty about what Musk intends to do with Twitter, as well as the future of a company with a leader who has wavered in his commitment to buy it. What if we have learned something from this saga is that Musk is unpredictable and it’s not over yet.
Marcy Gordon in Washington contributed to this report.