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Elon Musk suggests buying Twitter at its original price

Elon Musk suggests buying Twitter at its original price

The months-long battle over Elon Musk’s bid to buy Twitter has been huge in scale and drama. One of the biggest deals in the tech industry in recent years, it has captured the public’s imagination, with cinematic transformations closely followed even by people who never tweeted.

Now, Mr. Musk, in a sudden movement, has added another twist in the plot. After months of trying to get out of a deal he struck in April, the billionaire presented a proposal Monday night that could end the heated legal battle.

Musk said he would do exactly what he said he would do in April: acquire Twitter at $54.20 per share, according to regulatory filings announced Tuesday.

Twitter, which sued Mr. Musk in July to force him to move forward $44 billion dealhas yet to accept his new proposal and plans to add conditions to try to make sure he never changes his mind again.

In a short statement, Twitter said it had received Mr. Musk’s message and confirmed the company’s intention to close the deal. Three people familiar with the company’s plans, who were not authorized to speak publicly about them, said that Twitter may ask a court in Delaware, where the lawsuit was filed, for protective measures that would force Mr. Musk to pursue his new proposal. One of those people added that the company may also require Mr. Musk to pay interest on the transaction price to delay completion of the acquisition.

The agreement would allow the parties to avoid a chaotic trial that was expected to begin within two weeks in the Delaware Chance Court. The trial is likely to include testimony from Mr. Musk, who runs electric car maker Tesla, and senior Twitter executives. Mr. Musk is scheduled to be deposed Thursday and Friday in Austin, Texas, according to a legal claim.

Twitter has hardly been profitable for most of its history and dwarfs in size compared to other social media platforms like Facebook and younger TikTok. But the fight with Mr. Musk has preoccupied Silicon Valley, Wall Street and Washington because for years Twitter has been the online trumpet for tech industry billionaires like Mr. Musk and politicians like former President Donald J. Trump, whom the company has banned from taking part in its business. Last year’s podium after the January 6 riots on Capitol Hill.

If Mr. Musk takes over Twitter, one of his first big steps may be to let Mr. Trump back in. Mr. Musk said it was Twitter ‘mistake’ banning Mr Trump.

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The potential agreement comes after months of controversies that created existential challenges for Twitter, sending its share price down, demoralizing its employees and scaring the advertisers it depends on for revenue.

Mr. Musk, with his frequent harsh criticism of Twitter and its management, often seemed more interested in taking the ball to the company than in becoming its new owner. His critics argued that he was simply looking for anything to justify reversing a reckless decision that he soon regretted.

“I think he recognized that litigation was not going well on his part,” said Ann Lipton, professor of corporate governance at Tulane College of Law.

A deal at the original price would be a victory for Twitter. Mr. Musk announced in July that he no longer intends to continue with the acquisition because he believes Twitter service overrun by spam. Twitter sued him soon after.

Mr. Musk made his latest offer to Twitter on Monday evening, informing the company that he intends to move forward with his original offer. Musk’s lawyer wrote in the letter, according to regulatory deposit. The letter requested that the court battle be temporarily halted, pending completion of the deal.

The two sides met in court in an emergency virtual hearing on Tuesday to discuss the motion before Catalyn McCormick, the trial judge. The proposal was reported earlier by Bloomberg.

The source said that lawyers for Musk and Twitter are expected to meet again in court later on Tuesday to discuss next steps. If they choose to go ahead with the Twitter sale, the deal will likely close within weeks, or once Musk is handed over the $44 billion.

Three people familiar with the matter said that Twitter may ask Mr. Musk to agree to a court overseeing the closing of the deal. One of those people said the company may also require Mr. Musk to pay a daily interest fee for each passing day since shareholders approved the deal on Sept. 13.

“Procedurally speaking, Twitter has done everything they needed to close this deal,” said Brian JM Quinn, a professor at Boston College of Law. Quinn said that if the company accepted Mr. Musk’s proposal, it could request that the trial be postponed until the deal is complete. Once the acquisition is complete, Twitter will likely dismiss its lawsuit against Mr. Musk.

On Tuesday evening, Mr. Musk tweeted that “buying Twitter is accelerating the creation of X, applying everything.” X is the name of the holding company that Mr. Musk founded to buy Twitter.

Shares in the social media company rose more than 12 percent after news of Mr. Musk’s latest offer, before trading halted. Trading resumed in the afternoon, and Twitter’s share price closed at $52, up 22 percent.

The economic background has changed dramatically since Mr. Musk announced his intention to buy Twitter last spring. Amid inflation and geopolitical uncertainty, investors face kinds of losses They haven’t seen him since 2009. This has also made it more difficult to finance deals.

Investment banks, led by Morgan Stanley, have already agreed to help finance the deal with about $13 billion in debt. The banks remain in limbo until April, according to the terms of their contract.

Mr. Musk said he would fund the rest of the deal in cash. In April, he Sold About $8.5 billion shares in Tesla to help fund the deal; in May, He said he has raised about $7 billion in cash from a group of investors including venture capital firm Andreessen Horowitz and tech mogul Larry Ellison. It was not immediately clear what commitments these investors have made to Mr. Musk.

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In August, Mr. Musk Sold An additional $7 billion worth of Tesla stock in the “(hopefully unlikely) event that forced Twitter to close this deal. And the “Some equity partners are not coming,” he wrote at the time.

Twitter employees learned of Mr. Musk’s proposal from media reports as they participated in a company-wide meeting on the company’s plans for 2023 on Tuesday, Confusion and speculation That has upset the Twitter workforce for the past six months, four employees said.

Those people added that Paraj Agrawal, CEO of Twitter, did not immediately speak about Mr. Musk’s offer with employees. “I will continue to keep you posted on important updates, but in the meantime, thank you for your patience as we work through this legal aspect,” Sean Edgett, Twitter’s general counsel, said in an email to employees Tuesday afternoon.

In Slack’s internal messaging system on Tuesday, employees discussed the implications for the company, their jobs, and their stock compensation. In a channel of nearly 2,000 members used to joke about company news, some wondered what would happen if Twitter’s board did not accept Mr. Musk’s renewed offer. Some speculated that Twitter’s stock would decline, while another said, referring to Mr. Musk, that the company would not be owned by a “moron”.

While the agreement signals an end to the uncertainty surrounding Twitter’s immediate future, Mr. Musk’s plans for the company aren’t clear. He told investors before trying to back out of the deal that by 2025, the company could reach 500 million daily users and $13.2 billion in revenue.

Twitter and Mr. Musk She is set to face this month in a Delaware courtroom. The company argued in legal filings that Mr. Musk’s reasons for abandoning the deal were smoke screens, and indicated he was simply hoping for lower prices after the stock market plunged lower his fortune.

Mr. Musk said Twitter has likely reduced the amount of spam on its platform, making the company less valuable than initially thought. as martyred Whistleblower Claims From a former Twitter executive, he said the company misled regulators about its security practices, as a reason to exit the deal.

Ryan Mac Contribute to the preparation of reports.