Elon Musk, who had struck a deal to buy Twitter for $44 billion, then tried to back out of the agreement, triggering a lawsuit from the tech company, will be purchasing the platform at his original bid price.
Before it was halted, Twitter stock rose on the news that the world’s richest man would theoretically obey the terms of a merger agreement he signed after waiving due diligence, but it remains below $50 a share, whereas Musk’s offer stands at $54.20. Analysts have said the price overvalues Twitter by $20 a share — meaning Musk overpaid by some $17 billion.
Musk, an inveterate tweeter, earned substantial mockery yesterday for sharing a naive, pro-Russia “peace” plan for Ukraine on the social media site — one swiftly approved by the Kremlin and condemned by Ukrainian President Volodymyr Zelenskyy. It served as a nice distraction on the same day that his electric car company, Tesla, fell short of Wall Street’s third-quarter forecasts despite delivering a record number of vehicles.
The billionaire unconvincingly blamed the negative reaction to his diplomatic suggestion on a “bot attack,” alluding once more to his supposed reasoning for scuttling the Twitter takeover: too much spam and fake activity. This ongoing complaint is almost certainly due to his own particular experience as a highly engaged user with over 100 million followers — many of which are bots. But any concern over the influence of automated accounts seems to have evaporated in the past 24 hours.
Another potential factor in Musk’s reversal is legal discovery. Last week, as he and Twitter prepared to go to trial in the Delaware Court of Chancery to decide the fate of the acquisition, a trove of his text messages became public. Musk had once been eager to see the inner workings and dark secrets of Twitter revealed in this process, but instead had his conversations about the platform with his ultra-wealthy, sycophantic peers aired out for all to read. The logs also reveal how Musk was scrounging for financing on the deal from magnates like Larry Ellison and fielding advice from podcaster Joe Rogan to “liberate” Twitter from the “censorship happy mob.”
And with two weeks to go until the trial, Musk’s case was looking shaky on the merits, with Twitter’s lawyers arguing that the CEO’s own data on spam accounts aligns with their estimates. They also accused him of destroying evidence along with his financial adviser, Jared Burchall.
Twitter has yet to respond to Musk’s latest change of heart or address employees about it. Musk, somewhat uncharacteristically, has not tweeted today — except to discuss the unprofitability of Starlink, the internet service developed by his company SpaceX.