Elon Musk’s $44 billion buyout of Twitter now seems to be a reality.
On Tuesday, the billionaire’s representatives informed Twitter by letter that he wanted to proceed with the difficult sale, confirming prior claims that things were back on track.
“We write to inform you that the Musk Parties plan to proceed to close of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set out therein,” according to the notification filed with the Securities and Exchange Commission.
Musk and Twitter were set to go to court over the arrangement, with the Tesla and SpaceX CEO arguing that Twitter deceived him about the number of bots on the social network. Musk said, without offering evidence, that up to 20% of Twitter’s user base was made up of “fake/spam accounts.” Twitter has long claimed that bots account for fewer than 5% of its “monetizable daily active users” – a subset of its user base used as a statistic for advertisers. However, it appears that Musk will no longer pursue the matter.
“We received the letter from the Musk parties that they filed with the SEC,” Twitter said in a statement uploaded on its investor relations account. “The Statement intends to close the transaction at $54.20 per share,” the company noted.
Musk’s announcement pushed Twitter’s stock price up more than 12%, to more than $47 a share.
Musk plans to proceed with the sale “provided that the Delaware Chancery Court enter an immediate stay of the lawsuit, Twitter vs. Musk, et al., and defer the trial and all further processes,” according to the letter. In other words, Musk is willing to move forward as long as the case is dropped. However, given Musk’s erratic personality, another stumbling block might be put into the works.
While it’s unclear what prompted Musk’s decision, there have been a number of recent developments in the days building up to the trial, which was scheduled to begin on October 17. The court recently revealed a plethora of Musk’s texts on the deal that were discovered via the discovery process, and the messages plainly show him growing cold feet in light of the Ukraine conflict and a worsening global economic picture.
Last night, Delaware Chancery Court Judge Kathaleen McCormick granted Twitter’s request to analyse texts from Musk’s inner circle connected to a mystery anonymous email received by Musk’s lawyer Alex Spiro on May 6. The sender described themselves simply as a former Twitter executive in the email, which was sent using ProtonMail, and encouraged Musk’s team to follow up on a new platform.
While the informant remained anonymous, it appears that the email was sent by the former Twitter head of security Peiter Zatko, who denied contacting Musk prior to filing his whistleblower complaint in August. Musk’s team subpoenaed Zatko at the end of August, seeking evidence and records that may be used to make the argument that discoveries about the company’s security failings were enough to kill the merger.
Musk tweeted late Tuesday that purchasing Twitter will serve as an “accelerator” for a completely another project, “X, the everything app.” Musk’s enigmatic software big plan is likely unknown to all parties involved, however, he previously stated that if the Twitter transaction went through, he would start a social networking site named X. He does possess X.com and a holding company with the same name, but an app called X appears to be vaporware — or just a joke — rather than something that will truly materialise.
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