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Elon Musk has offered to buy Twitter at the originally proposed price of $44 billion. The billionaire faced the prospect of a long legal fight against the social network.
Elon Musk has changed his mind again: the boss of Tesla finally offered Twitter to buy the social network at the price agreed in April, two weeks before the trial scheduled between the two parties on this eventful acquisition.
The businessman “intends to conclude the transaction envisaged by the takeover agreement of April 25, 2022”, according to the terms provided, wrote his lawyers in a letter addressed to the Californian group on Monday, and filed Tuesday, October 4 with the gendarme American stock exchange, the SEC. The only condition expressed in the letter: the end of the legal proceedings in progress before the specialized court of Delaware.
The title of Twitter took more than 22% at the close of the New York Stock Exchange, after having been suspended all afternoon “pending information”, after an article by the Bloomberg agency which revealed this rebound.
Twitter intends to conclude
Elon Musk had offered in the spring to acquire the platform for 54.20 dollars per share, thus valuing it at 44 billion dollars. The board of directors, very reluctant at first, ended up accepting. But the whimsical entrepreneur unilaterally returned to this agreement in July. Twitter had then launched lawsuits to force him to honor his commitment, and everything indicated that he was well positioned to win.
On Tuesday, the group confirmed in a brief statement “to have received the letter” and to have the intention “to conclude this transaction” at the defined price.
“It’s a clear sign that Musk recognizes that his chances of winning (…) are very low and that the 44 billion buyout was going to have to happen one way or another,” reacted the analyst. Dan Ives of Wedbush Securities.
Elon Musk had bombarded Twitter with criticism before and after signing the contract, accusing the platform of censoring users. He justified his backtracking by saying that the proportion of spam and fake accounts on the platform was well over 5%, the figure put forward by the San Francisco company.
The trial was supposed to be held from October 17 to 21, but it will not take place if Twitter accepts this new offer.
>> To read also: In the Twitter-Elon Musk trial, the crucial role of the Delaware Court of Chancery
The multi-billionaire did not say why he had changed his mind, but split a cryptic tweet: “Buying Twitter is an accelerator to create X, the app for everything”.
Buying Twitter is an accelerant to creating X, the everything app
— Elon Musk (@elonmusk) October 4, 2022
X.com was an online banking startup co-founded by Elon Musk in 1999, later integrated into PayPal. The boss of Tesla (electric cars), SpaceX (rockets) and Neuralink (brain implants) bought the domain name in 2017.
In August, asked on Twitter about the possibility of creating his own social network, he replied “X.com”. “I have kind of a grand vision for what X.com or X company could have been (…) I don’t need Twitter, but Twitter could probably speed it up three years. I think that it is something that could be very useful for the world”, he also elaborated during the general assembly of Tesla.
“According to some speculation, Musk could have had to pay substantial interest if he had appealed, and therefore had to pay much more than the $54.20 per share,” comments Adam Badawi, professor of business law at the university. from Berkeley.
The Musk clan seemed to have gained a point when Peiter Zatko, the ex-Twitter security chief who was fired in January, accused the group of major security breaches in late August, in a report submitted to US authorities. But during preliminary hearings, the multi-billionaire’s lawyers seemed to struggle to substantiate the charges on the automated accounts.
The ball is now in the court of the blue bird, which will require “an armored contract this time”, estimates Adam Badawi. “They’re going to want Musk to advance a good chunk of the total sum” before signing, he adds.
“Engine of radicalization” in the making
Some six months after the start of the saga, the possibility that the richest man in the world will become the owner of Twitter is therefore again in the news, to the chagrin of many users and politicians.
The April agreement had indeed been greeted with a lot of emotions, from the anxieties of the left to the joy of the right at the idea that Elon Musk would relax the rules and the moderation of content.
“The platform will become an engine of radicalization if it delivers even a fraction of what it promised,” Angelo Carusone, president of the NGO Media Matters for America, said in a statement Tuesday.