Billionaire Elon Musk has agreed to follow through with a deal to buy Twitter at the original price, the company disclosed Tuesday, causing Twitter shares to skyrocket and possibly ending a seven-month legal saga just two weeks before the world’s wealthiest man and the social media company were set to meet in court.
Musk offered to buy Twitter for $54.20 per share, or $44 billion, matching the terms he agreed to in April before he later attempted to back off the deal, according to a letter dated Monday and filed with the Securities and Exchange Commission.
The brief 177-word note said Musk is willing to move forward with the deal provided there is an immediate stay on Twitter’s lawsuit to push the purchase through ahead of the five-day trial in Delaware slated to begin October 17.
Twitter shares rose 12.7% to $47.93 after Bloomberg reported on the letter, but trading was halted shortly after 12 p.m. ET due to pending news.
The stock later surged to $52.02—just below Musk’s agreed-upon purchase price—after trading resumed shortly before the market close, a 22.3% daily rise that brought the share price to its highest level since last November.
The company’s intends to “close the transaction at $54.20 per share,” Twitter spokesperson Brenden Lee wrote to Forbes, in a statement mirroring the company’s prior comments on Musk’s hesitation.
Twitter accepted Musk’s unsolicited takeover bid on April 25, three weeks after the billionaire disclosed he purchased a 9.2% stake in the company. Musk, a vocal opponent of the platform’s content moderation policy, quickly began to express cold feet and said he had concerns about the number of fake and spam accounts on the site, or bots. He formally requested out of the deal July 8, arguing Twitter has lowballed the number of bot accounts in its public filings. Twitter sued Musk four days later and argued his reasons for backing out of the deal were invalid. The company pushed a state court in Delaware to force Musk to buy Twitter along the originally agreed-upon terms, setting the stage for a high-stakes trial later this month. As the trial date drew nearer, more revelations about both Twitter and Musk emerged. Musk’s lawyers suggested last month his case was bolstered by a whistleblower complaint from Twitter’s former head of security, who alleged the company knowingly misled regulators and investors about the number of bots on the site. And last week, hundreds of Musk’s texts with celebrities like Twitter cofounder Jack Dorsey, controversial podcaster Joe Rogan and Gov. Ron DeSantis (R-Fl.) were disclosed as part of the suit.
We estimate Musk to be worth $236 billion, the largest fortune in the world by more than $80 billion, largely due to his stakes in Tesla and SpaceX.
Tesla shares fell about 5% in the hour after the report, paring gains earlier in the day, before recovering to a 2.4% gain on the day. Shares of the electric vehicle maker dropped about 20% in April amid a more modest broad market decline.
“This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another,” Wedbush analyst Dan Ives wrote in a note to clients Tuesday.
Musk Proposes to Buy Twitter for Original Offer Price of $54.20 a Share (Bloomberg)
Twitter Shareholders Formally Accept Musk’s $44 Billion Offer He’s Desperately Trying To Get Out Of (Forbes)