Elon Musk has reverted course and is proposing to buy Twitter for $54.20 a share after his legal team sensed that the judge would not rule in their favor and potentially avoid a courtroom fight, according to sources familiar with the matter. After the news broke, Twitter shares went up by 15%.
Musk sold $7 billion worth of Tesla shares on August 10, citing the possibility of a forced Twitter deal. Musk s action to sell Tesla shares contradicted the statement he made just less than four months ago when he said on social media that he had no more TSLA sales planned after April 28.
Musk said the funds could potentially be used to finance a potential Twitter deal if he loses a legal battle with the social media platform because of the decision to sell another share of Tesla.
Musk is in the midst of a legal battle with Twitter after backing out of the deal to acquire the social media giant in April for $44 billion due to spam and bot issues.
When closing the proposed transaction, the stockholders of Twitter will get $54.20 in cash for each share of the common stock they own.
The purchase price represents a 38% premium to Twitter's closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his 9% stake in Twitter. Musk needed to raise $21 billion in equity to take over the social media giant, because he needed to use his Tesla stock to raise $21 billion in equity.
After the news broke, Tesla's shares fell by almost $9, but are still up more than 2% on the day.
202 -- 0613 KSJM and adjourn the trial and all other proceedings related thereto pending the closing or further order of the court. A copy of which is attached hereto as Exhibit S and incorporated by reference is qualified in its entirety by reference to the full text of the letter.