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Elon Musk appears set to put an end to the conflict with Twitter by revisiting his original deal to acquire the company.
In a surprising turn of events, Elon Musk renewed his bid to purchase Twitter (NYSE: TWTR) for the original proposed price of $54.20 per share. A Tuesday regulatory filing revealed that the Elon Musk and Twitter deal could happen as soon as Friday. Furthermore, the social media giant also stated that it had received the letter of intent from the Tesla chief executive.
Elon Musk Revival of Twitter Bid Comes Ahead of Slated Legal Showdown Between Both Sides
Elon Musk’s surprise decision to proceed with the Twitter deal comes just weeks before the two parties were due in court. Twitter had initially sued the Tesla CEO to force the takeover deal, which resulted in a counter lawsuit from Musk. Ahead of the October 17th due date, the general assumption from observers was that the microblogging platform had the stronger case. This may have been an influencing factor in Musk’s decision to reverse course in order to avoid trial. Wedbush Securities analyst Dan Ives thinks this is the case as Musk’s chances of winning in court was “highly unlikely”. Upon the breaking of the news, Ives also wrote in a report:
“Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”
Following the new development, Musk later tweeted that “buying Twitter is an accelerant to creating X, the everything app.”
Elon Musk reportedly opted to complete the Twitter deal pending receipt of the financing and an end of the litigation. News of this decision helped spur the company’s stock more than 20% to over $52 a pop. This spike came about after a brief halt of Twitter’s shares after Bloomberg first reported Musk’s decision. Despite the positive development for the company’s stock, its value still remains lower than Musk’s proposed takeover price.
Optics of a Musk-Owned Twitter
The prospect of Musk assuming control of Twitter is now more pronounced following the new decision. However, several employees at the company are reportedly not keen on working under the outspoken and brash billionaire. According to a Bloomberg report, Musk has been openly criticized and mocked on internal Slack channels since the Twitter deal. Many of these Twitter employees were in the middle of planning 2023 presentations when the news of the deal’s revival broke. In an internal memo addressed to Twitter staff on Tuesday, General Counsel Sean Edgett appreciated employees for their patience. Furthermore, as the social media giant continues to work through the legal issues, Edgett added, “I will continue to keep you posted on significant updates.”