Tuesday, October 04, 2022

Elon Musk takes U-Turn on Twitter deal

US media said the world's richest man had sent a letter to Twitter vowing to honour the takeover price of $54.20 a share

Tesla owner Elon Musk. — Reuters/ File
Tesla owner Elon Musk. — Reuters/ File

Elon Musk has offered to push through with his buyout of Twitter at the original agreed price, reports said Tuesday, just weeks before the opening of a bitter court case over his effort to withdraw from the deal.

US media said the world's richest man had sent a letter to Twitter vowing to honour the takeover price of $54.20 a share — prompting a surge in the share value of the social network that triggered a suspension of trading.

The latest twist in the long-running buyout saga comes less than two weeks before the start of the high-stakes trial instigated by Twitter in an effort to hold the Tesla chief to the $44 billion deal he signed in April.

Musk was slated to be deposed by Twitter attorneys later this week in preparation for the trial.

A serial entrepreneur made rich through his success with Tesla electric cars, Musk began to step back from the Twitter deal soon after it was agreed.

He said in a letter in July that he was cancelling the purchase because he was misled by Twitter concerning the number of fake "bot" accounts, allegations rejected by the company.

Twitter, meanwhile, has been seeking material or testimony to prove Musk is contriving excuses to walk away because he changed his mind.

In July, a Delaware judge agreed to fast-track a trial on Twitter's allegations, which the company argued is impeding its financial performance.

Free speech or abuse?

Wedbush analyst Dan Ives said in an email that Musk's apparent pivot shows that he recognized his chance of winning in court was "highly unlikely, and this $44 billion deal was going to be completed one way or another."

Shares in Twitter were up 12.7% at $47.95, having been halted by the New York Stock Exchange following a Bloomberg report on a possible new takeover offer.

Musk made his unsolicited bid to buy Twitter without asking for estimates regarding spam or fake accounts, and even sweetened his offer to the board by withdrawing a diligence condition, the lawsuit against him said.

Seen by his champions as an iconoclastic genius and by his critics as an erratic megalomaniac, Musk surprised many investors with his pursuit of Twitter.

His potential stewardship of the social media site hit several bumps since the takeover attempt was made public, and sparked worry from activists over the lifting of the ban on Donald Trump —  as well as the possibility the new owner would open the gates to abusive and misinformative posts.

Musk —who sees himself as a free speech advocate — has said he favoured lifting the ban on Trump, who was kicked off the platform in January 2021 shortly after the former US president's efforts to overturn his election defeat led to the January 6 assault on the US Capitol.

Musk's norm-defying conduct has come as little surprise to watchers of the Tesla and SpaceX chief after years of statements that flout or test convention and sometimes provoke a crackdown from regulators.

Only on Monday, he was embroiled in a Twitter spat with Ukrainian President Volodymyr Zelensky over his ideas on ending Russia´s invasion.