Surprising many, Tesla and SpaceX CEO Elon Musk has signaled he will proceed with his proposed $44 billion ($54.20 per share) plan to purchase Twitter. According to a Tuesday report from Bloomberg, the move sent share prices surging 18%.
Negotiations concerning the sale of Twitter have been an on-again, off-again affair. Musk’s proposed $54.20 per share offer was initially rejected by the board — then accepted. Then Musk announced he was walking away from the deal because Twitter executives could or would not verify that the number of fake or “bot” accounts was less than 5% of reported users as the company claimed.
Musk speculated publicly that the number of fake accounts could be as high as 33%.
The turmoil, which includes damning information from a Twitter whistleblower Peiter Zatko, who alleges the company has serious security deficiencies, has had a negative impact on stock prices.
The Daily Wire notes that stock prices have declined 26% in the last year.
The Twitter Board responded by initiating legal proceedings to force Musk to move forward with the transaction. The matter is scheduled to be addressed in court on October 17.
Musk has also expressed reservations about moving forward with a hostile takeover of Twitter because of mounting geopolitical concerns — particularly Russia’s invasion of Ukraine.
“Let’s slow down,” Musk wrote. “Putin’s speech tomorrow is extremely important. It won’t make sense to buy Twitter if we’re heading into World War III.”
Twitter executives have tried to steer the company into calmer seas but without great success. Second quarter earnings show losses of $0.08 per share, falling below the $0.14 gain per share forecasted by company analysts.
A company press release blamed the dropping stock prices on “advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”
The Washington Post reports that Twitter’s Board is considering Musk’s new proposal but has been slow to respond “because of fears that it could be a legal ploy.”
If parties cannot come to terms in the next 12 days, Judge Kathaleen McCormick, the Delaware magistrate overseeing the merger, will consider the latest news and rule on vested parties will move forward.
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