Elon Musk offered to buy Twitter for $44 billion, a purchase that would put him in charge of one of the most influential media platforms.
The world's richest person made an offer yesterday after spending months trying to get out of the deal. If it goes ahead, it will raise questions about the future of Twitter, which Musk, who has 107.8 million followers, said he will make more free-speech orientated.
He said he would reinstate Donald Trump's account, calling the ban flat-out stupid Last night Musk tweeted: Buying Twitter is an important part of creating X, the everything app. Musk, 51, and Twitter had been indicted on October 17 in Delaware. In April of this year, Twitter tried to force the Tesla chief to go ahead with a bid of $54.20 per share, or $44 billion.
Last night, Twitter confirmed that it had received a letter from Musk. The intention is to close the transaction at $54.20 per share. The company plans to accept the offer but is waiting for confirmation that a judge can oversee the process.
Twitter shares went up 21 per cent on the news, which caught Twitter employees by surprise. Rumman Chowdhury, director of machine-learning ethics, transparency and accountability, said: I am sitting on 2023 company-wide strategy readouts and I guess we are going to ignore what is going on. The future of Twitter's chief executive officer, Agrawal, is uncertain, given that Musk has said he has no faith in the company's management. Agrawal could get $42 million in a short time if he is sacked within 12 months, according to one estimate.
Musk had agreed to buy Twitter without due diligence, but within a few weeks the number of bot or spam accounts was much higher than Twitter's estimate of less than 5 per cent. He argued that this made the company less valuable, negating the deal. He was seeking to use in court claims from an executive who claimed that Twitter had misled regulators about its security practices.
The plans of Musk were opposed by many employees and influential users of Twitter, which has 200 million daily active users. He told investors that by 2025 he could get 500 million daily users and revenue of $13.2 billion.
Eric Talley, a law professor at Columbia University, said he was not surprised by Musk's U-turn. His case didn't look strong on the legal merits, he said. It seemed like a simple buyer's remorse case. Daniel Ives, an analyst at Wedbush Securities, said that being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario.
There are minimal regulatory risks in this deal, so it is a smart move for Musk to go ahead with the deal, given the legal hurdles that were ahead of them.