Tesla’s chief, Elon Musk, has proposed to go ahead with the original Twitter deal priced at $54.20 per share, hence, reversing his attempt to back out of the deal. The social media company has also confirmed receiving the letter and said, “We received the letter from the Musk parties, which they have filed with the SEC. The Company intends to close the transaction at $54.20 per share.”
Twitter issued this statement about today's news: We received the letter from the Musk parties which they have filed with the SEC. The intention of the Company is to close the transaction at $54.20 per share.
— Twitter Investor Relations (@TwitterIR) October 4, 2022
Twitter Share Rises as Musk Revived the Deal
As the news broke out regarding Musk planning to go with the original Twitter deal price, the shares of Twitter climbed by as much as 18 percent, after which trading was briefly halted; according to the media reports, the company’s shares closed up on more than 22 percent on Tuesday. It also stated that the deal could happen as soon as Friday.
The development came ahead of a highly anticipated face-off between Musk and Twitter in Delaware’s Court of Chancery on the 17th of October. The micro-blogging company prepared to seek an order directing Musk to close the deal at the original $54.20 per share. Moreover, most of Twitter’s shareholders have already voted in favor of the tech billionaire’s bid to take the company private.
Little Background of Musk-Twitter Fiasco
In April 2022, Musk proposed to buy Twitter at $44 billion or $54.20 per share. Still, he quickly backed off, citing several reasons, the most important one being the number of bot accounts that were anticipated to be much higher than Twitter’s estimate of less than 5% of users. Later in July, he officially informed the company about his intentions to terminate the agreement. Now, Before Delaware’s face-off, Musk has again proposed to buy Twitter at the same deal. Wedbush analyst Dan Ives wrote, “This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was doubtful, and this $44 billion deal was going to be completed one way or another.”