Elon Musk’s $44 billion takeover of Twitter appears to be a reality.
On Tuesday, the billionaire’s representatives informed Twitter via letter that he intends to proceed with the tumultuous deal, confirming earlier reports that things were back on track.
“We write to inform you that the Musk Parties intend to close the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein,” reads the notice, which was filed with the Securities and Exchange Commission.
Musk and Twitter were set to go to court over the deal, with the Tesla and SpaceX CEO claiming that Twitter misled him about the number of bots on the social network. Musk claimed, without providing 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 less than 5% of its “monetizable daily active users” — a subset of its user base used as a metric 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 shared on its investor relations account. “The Company intends to close the transaction at $54.20 per share,” the company added. Musk’s announcement sent Twitter’s stock price up more than 12%, to more than $47 per share.
Musk intends to proceed with the deal “provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al., and adjourn the trial and all other proceedings,” according to the letter. In other words, Musk is willing to move forward as long as the lawsuit is dropped. However, given Musk’s chaotic nature, another stumbling block could be thrown into the works.
While it’s unclear what prompted Musk’s decision, there have been a number of recent developments in the days leading up to the trial, which was scheduled to begin on October 17. The court recently published a trove of Musk’s texts about the deal that were discovered during the discovery process, and the messages clearly show him getting cold feet in light of the Ukraine conflict and a worsening global economic picture.
Another twist occurred last night, when Delaware Chancery Court Judge Kathaleen McCormick granted Twitter’s request to review texts from Musk’s inner circle in connection with a mysterious anonymous email received by Musk’s lawyer Alex Spiro on May 6. The sender identified himself only as a former Twitter executive in the email, which was sent via ProtonMail, and asked Musk’s team to follow up on a different platform.
While the tipster remained anonymous, it appears that the email was sent by former Twitter head of security Peiter “Mudge” Zatko, who denied contacting Musk prior to filing his whistleblower complaint in August. Musk’s team subpoenaed Zatko at the end of August, seeking testimony and documents that could be used to make the case that revelations about the company’s security lapses were enough to kill the deal.
Musk tweeted late Tuesday that purchasing Twitter would serve as a “accelerator” for a completely different project, “X, the everything app.” Musk’s mysterious software grand plan is likely unknown to all parties involved, though he previously stated that if the Twitter deal fell through, he would launch a social media site called X. He does own 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 anything that will actually materialize.