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Elon Musk again proposes to buy Twitter at full price in a major reversal

New York

Elon Musk sent a letter to Twitter on Monday proposing to follow through on a deal to buy the company at the originally agreed-upon price of $54.20 per share, according to a securities filing on Tuesday.

In the letter, Musk said he would proceed with the acquisition on the original terms, pending receipt of the debt financing for the deal, and provided the Delaware Chancery Court stayed litigation over Musk’s first attempt to pull out of the deal and delay the deal. upcoming trial on the dispute.

A Twitter spokesperson said in a statement to CNN that the company received Musk’s letter and reiterated its earlier statement that “the intention of the company is to close the transaction at $54.20 per share.”

Musk Tuesday night tweeted: “Buying Twitter is an accelerator to make X, the everything app.”

News of the letter was first reported by Bloomberg earlier Tuesday. Twitter ( TWTR ) stock was halted twice, the second time due to pending news. After the stock resumed trading, it was up more than 20%, hitting $51 a share and approaching the agreed price for the first time in months.

The news comes as the two sides have prepared for trial in two weeks over Musk’s attempt to terminate the $44 billion acquisition deal, which Twitter had sued him to complete. Twitter CEO Parag Agrawal was set to be deposed by Musk’s lawyers on Monday, and Twitter’s lawyers had planned to depose Musk starting Thursday.

It also follows the release on Friday of a number of Musk’s personal text messages about the deal. The messages offered a look at the cast of Silicon Valley insiders and billionaires — from Larry Ellison to members of the Murdoch family — who contacted him to review and, in some cases, offer financing for the deal.

Such a deal could end a contentious, months-long back-and-forth between Musk and Twitter that has created massive uncertainty for employees, investors and users of one of the world’s most influential social media platforms.

The ball will now be with Twitter to figure out how to respond to Musk’s proposal. Twitter’s board is likely to agree to move forward with closing the deal, according to Josh White, assistant professor of finance at Vanderbilt University.

“The very public saga has certainly taken a toll on them and the Twitter staff,” White said. “It is best for all parties to finalize the agreement and make a quick and seamless transition. I suspect it will close quickly.”

However, Twitter may not take a break from the lawsuit, according to Musk’s proposal, until the deal is officially closed, according to Columbia Law School professor Eric Talley. The company may want to continue with the legal process while it negotiates with Musk, in case his offer to complete the deal falls through again.

“Twitter is probably going to say, ‘look, we definitely want to engage you in this… But we still have a trial on October 17th, and until this is signed, sealed and delivered, we have to get ready for trial,'” Talley said.

The saga began in April when Musk revealed that he had become Twitter’s largest shareholder. Over the next few months, Musk accepted and then withdrew from an offer to serve on Twitter’s board, threatened a hostile takeover of the company, signed an agreement to buy the company, began raising concerns about bots on the platform, attempted to end the deal, was sued by Twitter to follow through on the deal and added claims from a Twitter whistleblower to his argument.

Musk initially moved to terminate the deal citing allegations that the company misreported the number of spam and fake bot accounts on the platform. Twitter claimed that Musk had breached the deal and used bots as a pretext to end a deal he had suffered buyer’s remorse after the broader market decline, which also hurt Tesla stock and, by extension, Musk’s personal fortune.

Throughout the back and forth, Twitter had maintained that it planned to follow through on the deal at the price and terms originally agreed upon.

Many legal experts have said that Twitter has the stronger case going to court, and that Musk will face a significant burden in trying to prove that the company had made material misrepresentations in its securities filings or in the settlement agreement.

The lawsuit was the last remaining hurdle to closing the deal, after Twitter shareholders last month voted to approve the deal. The deal was originally set to end this month.

With news that the deal could be off, attention may once again shift to what Musk’s control could mean for the social media platform.

Musk has previously proposed a number of potential changes to Twitter, the most important of which could be to return former President Donald Trump to the platform and abolish permanent account bans. Musk has also said he wants to make Twitter more open to “free speech” and may change its content moderation guidelines.

Twitter employees have also raised questions about what a Musk takeover could mean for benefits like telecommuting and parental leave.

Twitter general counsel Sean Edgett said in a memo to employees Tuesday that the company had received Musk’s letter and planned to close the deal at $54.20 a share. “I will continue to keep you posted on important updates, but in the meantime, thank you for your patience while we work through this on the legal side,” he said, according to a copy of the message obtained by CNN.

Blind, an anonymous private forum popular with Twitter employees, was abuzz on Tuesday amid reports of Musk’s reversal. Reaction to the forum was overwhelmingly negative, according to screenshots provided to CNN by a Twitter employee.

“Look at the layoffs,” read one comment. Several other employees expressed fears that Musk would roll back Twitter’s benefits package, including the severance offered to departing employees.

—CNN’s Donie O’Sullivan contributed to this report.

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