A securities filing revealed on Tuesday (Oct. 4), that billionaire Elon Musk is planning to proceed with his initial bid of$44 billion to take Twitter private. This marks the conclusion of a legal dispute that might have required Musk to make payment.
Musk, the CEO of electric car manufacturer Tesla, will take over a company he once committed to purchasing in April but quickly changed his mind about. An agreement would end months of litigation that hurt Twitter's reputation and fueled Musk's reputation for erratic conduct while putting the world's richest person in command of one of the most powerful media platforms.
While Tesla shares rose 2.9% to $249.44, Twitter shares increased by 22.2% to close at $52.00.
The information comes ahead of a highly anticipated encounter between Musk and Twitter at Delaware's Court of Chancery on Oct. 17, in which the social media company was planning to ask for an order compelling Musk to finalize the US$44 billion deal.
In a statement on Twitter on Monday, Musk declared his intention to carry out the agreement on its original terms in the event that the Delaware judge stayed the proceedings. According to a source knowledgeable with the Twitter team, the judge asked the two sides to return in the evening during a court hearing on Tuesday morning.
It wasn't immediately obvious why Musk chose to give up the fight. He was about to be deposed, which would have involved difficult interrogation.
The number of bot accounts was far larger than Twitter's estimate of less than 5% of users, according to Musk, one of the site's most well-known users, who claimed in July that he could leave without facing consequences. The usage of bots, which are automated accounts, can cause an overestimation of the number of actual users using the service, which is crucial for determining advertising rates and the overall worth of the service.
On Sept. 27, Twitter's legal team stated that records received from two data scientists working for Musk revealed their estimates of the percentage of false accounts on the site to be between 5.3% and 11%.
"None of these analyses so far as we can tell remotely supported what Mr. Musk told Twitter and told the world in the termination letter," Twitter lawyer Bradley Wilson told the court.
A representative for Twitter said the company had received Musk's letter and intended to finalize the transaction at the original $54.20 cost. But Twitter remained silent on whether it had accepted Musk's proposal.
