Twitter stock surges after the reported renewal of the buyout offer from Elon Musk
Twitter soars 23% as Elon Musk is renewing a takeover. Source: unsplash.com
Twitter shares hit a high of $52.20 on Tuesday after Bloomberg reported that Elon Musk wishes to avoid the trial and stick to the original plan of buying the social networking company.
The original bid was $54.20 per share, bringing the total deal value to $44 billion. Most of the funding was supposed to come from Musk himself. The eccentric billionaire was expected to raise about $31 billion in equity, whereas Morgan Stanley committed to raising $13 billion in debt to fund the deal.
Since April, the two parties were contesting their interests in the legal battle. Thus, Tesla’s founder claimed that Twitter was overrun by bots and fake accounts. In response, Twitter sued the billionaire in Delaware Chancery Court to force him to go forward with the purchase. As the deal was derailed, the Twitter stock fell to 39,57 dollars per share, well below the nominal purchase price.
Fairly speaking, chances of getting out of the buyout were thin as Musk had entered an airtight contractual agreement to buy the company, later waiving due-diligence rights on the deal. Besides, Judge Kathaleen St. J. McCormick repeatedly took the side of Twitter in pretrial rulings. Therefore, Musk’s attorneys have probably advised on saving the court proceeding costs.
Twitter management said it intends to close the deal at the previously set terms. Musk, in his turn, teased the audience about his plans for Twitter: “buying Twitter is an accelerant to creating X, the everything app.” The buyer suggested Twitter should be more like TikTok and WeChat, with more highly engaged users.
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