Twitter stock was paused twice, the second time due to awaiting news, and jumped nearly 13% in midday trading Tuesday following news that Elon Musk has suggested to proceed with his plan to purchase the firm for the previously agreed-upon price of $54.20 per share.
According to sources, Musk issued a letter to Twitter (TWTR) on Tuesday proposing to finish the agreement as initially inked.
Musk and Twitter representatives did not reply to a request for comment immediately.
The announcement comes as the two parties prepare to go to trial in two weeks over Musk’s effort to back out of the $44 billion acquisition agreement that Twitter had sued him to execute. Twitter CEO Agrawal was scheduled to be interviewed by Musk’s attorneys on Monday, while Musk was scheduled to be interviewed beginning on Thursday.
It also comes on the heels of the revelation of a trove of Musk’s personal text messages regarding the deal on Friday. The texts provided insight into the cast of Silicon Valley elites and billionaires — from Larry Ellison to members of the Murdoch family — who called him to comment on, and in some cases, provide finance for, the purchase.
According to Josh White, associate professor of finance at Vanderbilt University, Twitter’s board would likely agree to halt the litigation in order to close the acquisition.
“The extremely public affair has undoubtedly taken its toll on them and Twitter staff,” White added. “It is best for all parties to finish the deal and make a quick and seamless transition. I suspect it will close quickly.”
Musk disclosed in April that he had become Twitter’s largest shareholder. Over the next few months, Musk accepted and then rejected an offer to join Twitter’s board of directors, threatened a hostile takeover of the company, signed an agreement to buy the company, began raising concerns about bots on the platform, attempted to terminate the agreement, was sued by Twitter to complete the deal, and added claims from a Twitter whistleblower to his argument.
Musk first attempted to terminate the agreement, alleging allegations that the business had overstated the amount of spam and phony bot accounts on the site. Twitter said Musk had broken the agreement and was using bots as a pretext to back out of a contract he’d acquired buyer’s remorse over following the larger market collapse, which also damaged Tesla shares and, by implication, Musk’s personal riches.
Throughout the back and forth, Twitter maintained that it intended to complete the acquisition at the original price and terms.
According to numerous legal experts, Twitter has the better case going into court, and Musk would face a substantial hurdle in proving that the firm made materially deceptive representations in its securities filings or in the purchase contract.
The lawsuit was the final impediment to the deal’s completion, after Twitter shareholders voted to support it last month. The transaction was supposed to close this month.
Musk has already mentioned a number of potential Twitter improvements, the most significant of which might be the restoration of former President Donald Trump to the network and the elimination of permanent account bans. Musk has also stated that he wants to make Twitter more accessible to “free expression” and that the company’s content control procedures may alter.
Employees at Twitter have also expressed concerns about what a Musk acquisition may imply for perks like remote working and parental leave.