In his first tweet since the U-turn was announced, Musk said that buying Twitter ‘is an accelerant to creating X, the everything app’.
Just days before a trial was set to begin over Elon Musk’s attempt to abandon his $44bn takeover of Twitter, the Tesla chief has decided to revive the deal.
In a letter sent to Twitter and filed with the Securities Exchange Commission (SEC) yesterday (4 October), Musk’s lawyer said the billionaire has agreed to proceed with the acquisition deal agreed back in April.
“We write to notify you that the Musk parties intend to proceed to closing of the transaction contemplated by the 25 April 2022 merger agreement, on the terms and subject to the conditions set forth therein,” the letter reads.
According to filings published on 8 July, Musk claimed that Twitter ignored his requests on the number of fake accounts on its platform, rejected them for reasons that “appear to be unjustified” and gave “incomplete or unusable” information.
But Twitter hit back with the claim that Musk was refusing to keep his end of the deal because it “no longer serves his personal interests” and that the lawsuit followed “a long list of material contractual breaches by Musk that have cast a pall over Twitter and its business”.
One possible explanation for Musk’s latest U-turn on the deal is that it was unlikely he would win the trial at the Delaware Chancery Court. This is despite his attempts to build a case, including subpoenaing Twitter whistleblower Peiter Zatko to testify regarding the company’s alleged malpractices.
If the trial didn’t go his way, Musk may have been required to pay even more than the initial $44bn offering – and suffer reputational damage from the prolonged back and forth.
In his first tweet since news of him buying Twitter again broke, Musk said the deal would be “an accelerant” to creating X – an “everything app”.
Buying Twitter is an accelerant to creating X, the everything app
— Elon Musk (@elonmusk) October 4, 2022
The X Holdings company, also mentioned in yesterday’s letter, was created around the same time Musk was first planning to buy Twitter. Its website, X.com, has nothing but the letter ‘x’ against a white background.
Through its investor relations account, Twitter released the following statement yesterday: “We received the letter from the Musk parties which they have filed with the SEC. The intention of the company is to close the transaction at $54.20 per share.”
Mike Proulx, VP research director at market research company Forrester, said that if Musk does take over Twitter after this “on-again, off-again, and back-on again deal”, his number-one priority must be to win the trust of Twitter’s employees.
“That’s no small task as he’ll be starting from a large trust deficit,” Proulx said. “Twitter’s future is bleak without an engaged employee base and there’s a lot of repair work to be done there.”
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Elon Musk at the Bloomberg Vanity Fair After Party 2015. Image: Haddad Media/Bloomberg (CC BY-NC-ND 2.0)