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Elon Musk agrees to move forward with $44 billion Twitter deal

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Tesla ( TSLA ) CEO Elon Musk has agreed to move forward with his $44 billion deal to buy Twitter ( TWTR ), according to an amended regulatory filing by the social media giant on Tuesday.

Shares of Twitter soared on the news, rising more than 12.7% before being halted by volatility. When trading resumed at around 3:30 pm EST, shares continued to climb, ending the day up 22%.

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Musk filed a confidential letter in Delaware Chancery Court earlier Tuesday. The about-face comes just days before Musk was deposed by Twitter’s lawyers in the company’s lawsuit for allegedly forcing the Tesla CEO to buy the company.

In its securities filing, Twitter published a letter from Musk that he “intends to complete the transaction” created to facilitate the merger of the social network and Musk’s holding companies, originally reached on April 25, 2022.

In the letter, Musk agreed to go along with the original deal until he received the funding he originally sought — and until the court stayed Twitter’s lawsuit against him. The Tesla CEO claims no responsibility.

“We have received a letter from the Musk parties regarding their filing with the SEC,” a Twitter spokesperson said in an email to Yahoo Finance. “The company’s objective is to close the transaction at $54.20 per share.”

Musk initially agreed to buy Twitter for $54.20 per share, but quickly backed out of the deal on July 8, saying Twitter had not provided enough information about the number of fake accounts on the platform. Four days later, Twitter retaliated against Musk, filing a lawsuit in Delaware Chancery Court, hoping to force Musk to buy the company.

Musk may have reversed course again because his lawyers expected him to lose that case.

“Musk is finally listening to his lawyers. He would be a fool not to try to buy the company, at least now, to avoid being impeached during the trial,” said Anat Alon-Beck, assistant professor of law at Case Western Reserve University School of Law. Yahoo Finance said.

In its lawsuit, Twitter said Musk’s concern about fake accounts was an excuse to back out of the deal as the stock market began to take a turn for the worse. In fact, according to text messages made public last week as part of Twitter’s lawsuit, Musk had raised concerns about the issue long before backing out of the deal.

Fake accounts, known as bots, can spread false information and scare off advertisers who want to sell ads to real people. Musk told a Twitter board member in April — before he agreed to buy Twitter — that “drastic” action was necessary to deal with bots, according to newly released text messages.

“It is difficult to do this as a public company because removing fake users will make the numbers look terrible, so the restructuring should be done as a private company,” he said.

Tesla CEO Elon Musk is again trying to buy Twitter for $44 billion. (AP Photo/Susan Walsh, File)

“It’s also Jack’s opinion,” Musk said of Twitter co-founder and former CEO Jack Dorsey.

According to University of Iowa law professor Robert Miller, Musk should have no problem tapping the $12.5 billion in debt financing that Morgan Stanley originally did.

“There’s no way Morgan Stanley is leaving,” Miller said.

Twitter’s shareholders approved the sale to Musk during a special shareholder meeting in September, meaning he will soon take control of the social media platform unless Twitter agrees to move forward with Musk.

However, how exactly Musk will manage Twitter is an open question. In the past, Musk has said the site needs to be less aggressive with moderation and wants to restore the accounts of banned users like former President Donald Trump. He also discussed moving away from the advertising model and taking the company private to deal with bots.

But reducing moderation can have serious consequences for Twitter. Users may no longer use the Service if objectionable content is excessive. Advertisers, meanwhile, may stop buying ads on the platform for fear of their products appearing next to misinformation or misinformation.

Twitter’s business has suffered along with its social media peers in recent weeks. In the second quarter, the company missed analysts’ expectations on earnings per share and revenue, blaming both macroeconomic conditions and Musk’s decision to walk away from the deal.

This story has been updated to reflect Twitter’s revised filing with the SEC.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @Alexisquiet.

Got a tip? Email Daniel Hawley at [email protected] Follow him on Twitter @Daniel Hawley.

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Elon Musk agrees to move forward with $44 billion Twitter deal

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