AUSTIN, TX – Suddenly reversing course Tuesday after attempting to back out of the deal for several months, Tesla CEO Elon Musk created shockwaves by putting his original offer to purchase Twitter at $54.20 per share – which would equate to $44 billion – back on the table, causing shares in the social media microblogging platform to spike.
The Tesla CEO made headlines in early April when he purchased a 9.2 percent stake in Twitter – the equivalent of 73.5 million shares or $2.89 billion – making him the platform’s largest shareholder. Later that month, Musk then made an offer to purchase Twitter outright, which the company accepted.
Musk noted his plans to take the publicly-traded company private and make it a “platform for free speech” by greatly toning down the platform’s extremely strict content moderation policies.
However, the billionaire then stated that he was backing out of the deal in July, citing allegations that Twitter had misrepresented the number of spam and fake accounts among its user base. The company responded by filing a lawsuit against Musk in an attempt to force him to go through with the purchase, with the South African business tycoon filing a counter-suit in turn.
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Musk and Twitter had originally been set to meet before a Delaware judge on October 17; Tuesday’s move by the SpaceX CEO to reinstate his offer to buy the platform – for the same amount that Twitter shareholders agreed to in April – has Wedbush analyst Daniel Ives guessing that Musk is aware that his chances in court aren’t favorable.
“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,” Ives said. “We see minimal regulatory risk in this deal although now Musk owning the Twitter platform will cause a firestorm of worries and questions looking ahead among users and the Beltway.”