After months of controversy, Elon Musk will be the owner of Twitter

Twitter, courtesy from Muy Computer

“The company’s intention is to close the transaction for $54.20 a stock,” reported the social network.

This Tuesday twitter expressed its interest in Tesla CEO Elon Musk acquiring the social network for $44 billion, as they had previously agreed.

“The company’s intention is to close the transaction for $54.20 a stock,” Twitter wrote in reaction to a proposal from Musk that was sent hours earlier to the company and the U.S. Securities and Exchange Commission (SEC).

It stated that the billionaire “intends to proceed with the closing of the transaction contemplated by the April 25th, 2022 merger agreement, on the terms and subject to the conditions set forth in the agreement”.

Twitter and Musk had agreed to acquire the company for $52.20 per share, but the billionaire later reversed the transaction, arguing that he had found a material breach of several provisions of the agreement, including the number of fake accounts posted by the company.

In recent weeks, Musk had also reproached Twitter for the compensation without his consent of Peiter Zatko – former chief security officer. Zatko had denounced that the social network hid from regulators relevant information about its cyber defense deficiencies and the number of fake accounts.

This offer comes two weeks after the start of the trial in Delaware, following the lawsuit filed by Twitter, which sought to force Elon Musk to proceed with the purchase. At this instance, which was scheduled for October 17th, Musk hoped that the judge would exempt him from formalizing the acquisition to which he had committed.

Nevertheless, Eric Talley, a professor at Columbia University, explained that he was not surprised by this change in the CEO’s position since the trial that awaited him “was not going to be pleasant.” “On the legal side, his case was not very strong. It looked like a typical buyer’s remorse scenario,” he added.

If Musk lost the case, he would have been faced not only with finalizing the purchase but also with paying interest that would have driven up the price, the professor explained.

If Musk lost the case, he would not only have been forced to finalize the purchase but also face interest payments that would have increased the price, explained Eric Talley (REUTERS).

In his letter sent to the SEC, Musk made reference to this instance and conditioned the closing of the deal to the conclusion of the judicial process along with all ongoing proceedings related to this issue.

After the news of the purchase, the shares of the social network soared: they rose 22.24% this Tuesday to reach a value of 52.00 dollars. At the moment and as a result of this, the stock market activity is temporarily suspended. Tesla shares closed at $249.44, up 2.90% by the end of the trading day on Wall Street.

Likewise, the New York Stock Exchange also saw a strong rise with indexes such as the Nasdaq gaining 3.34 % on the day.

Following news of the purchase, the social network’s shares soared (AFP).

In July of this year, Twitter’s shares had low peaks that took the share price to $32.7.

References:

anónimo. (2022, octubre 4). Tras meses de polémica, Elon Musk será el dueño de Twitter: la empresa aceptará la nueva oferta. infobae. https://www.infobae.com/america/mundo/2022/10/04/tras-meses-de-polemica-elon-musk-sera-el-dueno-de-twitter-la-empresa-aceptara-la-nueva-oferta/?outputType=amp-type

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