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Surprising turnaround: Elon Musk now wants to buy Twitter after all
Tesla boss and multi-billionaire Elon Musk in Washington. photo
© Susan Walsh/AP/dpa
After months of bickering, Elon Musk’s takeover of Twitter could finally happen. Shortly before the eagerly awaited court case, the Tesla boss gives in and renews his offer – at the originally agreed purchase price.
Tech billionaire Elon Musk is giving up his resistance and now wants to complete the $44 billion takeover of the online network Twitter after all. Surprisingly, he agreed to pay the price he originally offered of $54.20 per share.
Musk has actually been trying for months to get out of the deal he initiated himself. But Twitter did not want to let him go, referring to the binding purchase agreement. A trial in the dispute is actually scheduled for mid-October. Whether that will happen is unclear after Musk’s sudden change of heart.
The Tesla boss confirmed his yielding in a mandatory announcement to the US Securities and Exchange Commission. This marks the start of a spectacular turnaround in the takeover conflict. However, some uncertainty remains – Musk pointed out to the SEC that his offer is dependent on funding commitments. This leaves a small back door open. If loans and investments from other financiers with whom he wants to realize the mega deal should burst, there could still be a way out for him. “It’s not decided yet,” warned the investment house MKM Partners on Wednesday. There is no guarantee that Musk will close the deal.
Twitter stock soared
After his turnaround, the star entrepreneur himself only wrote that the purchase of Twitter would speed up his path to “X, the app for everything”. And by three to five years, he added in a tweet. What exactly is behind his vision for a universal app remained unclear. In a brief statement, Twitter confirmed that it had received the letter with Musk’s renewed offer. The company intends to complete the transaction as planned. Twitter shares rose 22 percent to $52 on Tuesday, but fell slightly before the market on Wednesday. According to the “New York Times”, the company does not really trust Musk and is considering having the completion of the takeover monitored by a judge.
Musk actually voided the April purchase agreement in July because Twitter allegedly misrepresented the number of fake accounts on its platform. However, the company insisted on compliance with the purchase agreement and went to court. In the past few days, some embarrassing chat conversations with potential investors, among others, have become public as part of the process documents for Musk. At the court hearing, which is supposed to begin in Delaware in about two weeks, he could face further embarrassment.
Musk’s legal team got the impression that the case was developing against him and that the judge had already sided with Twitter after the first hearings to prepare for the trial, the financial service Bloomberg reported on Tuesday, citing an insider. To get out of the multi-billion dollar deal, Musk would have had to prove the company had serious breaches of contract.
The whistleblower thing
The exact reasons for Musk’s rethinking remained unclear for the time being. Many experts assessed his chances in the court case as unfavorable from the start. For months, Musk tried to portray allegedly false information from Twitter about the number of spam and fake accounts as a breach of the takeover agreements. But whether that would be enough in court is doubtful.
In August, Musk came up with new arguments in an attempt to call off the multi-billion dollar takeover of Twitter. The Tesla boss brought up allegations by a whistleblower who accused Twitter of, among other things, a lack of protection of user data and other security weaknesses. Because of these “outrageous” flaws, Musk’s purchase offer for Twitter was to be classified as invalid, his lawyers wrote to the company at the time.
The whistleblower is Peiter Zatko, Twitter’s ex-security chief. He was fired in January and later filed a complaint with the US Securities and Exchange Commission. The IT expert, who is also known by his pseudonym “Mudge” from earlier times as a hacker, made serious allegations against the Twitter leadership and described the online platform at a Senate hearing as a “ticking bomb of security vulnerabilities”.
Political explosiveness
If Musk were to buy Twitter, the ailing company would be owned by the man who has publicly criticized its leadership almost incessantly for the past few months and has cast doubt on the value of the company. However, Musk’s plan is to take Twitter out of the stock market and set up a new management anyway. If the richest person in the world were to pull the strings on the online platform, it would also be politically explosive. It is exciting, for example, whether Twitter will then resume the former US President Donald Trump.
Musk emphasized from the start that he was not interested in the Twitter takeover for money, but rather to strengthen freedom of speech on the platform. In an interview in May, Musk described Trump’s ban from Twitter in the course of his expressions of sympathy for supporters who stormed the Capitol in Washington on January 6, 2021 as “morally wrong and just plain stupid”. A return could come just in time for Trump with a view to a possible candidacy in the 2024 presidential election.
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