Elon Musk plans to buy Twitter for its initial public offering price — and he’s hinted at his plans for the social media giant.
The world’s richest man is offering to buy the platform for $54.20 a share, worth a total of $44bn (£38.4bn), after months of legal battles.
After the news of the reinstatement deal, Mr. Musk said that “buying Twitter is an accelerator to create X, the app for everything.”
And he said buying the rig moved his X project forward by three to five years, “but I could be wrong.” He gave no further details.
The idea behind X is a sort of super app combining messaging, social media, payments and not relying on advertising revenue, similar to China’s WeChat. It already has more than one billion users, but so far no equivalent exists in the West.
Earlier, trading in shares of Twitter was suspended as the share price jumped following reports that the deal had resumed. Shares rose nearly 13% to $47.93 before trading was halted.
Mr Musk offered to stick with the original deal in a letter to Twitter, he disclosed in a filing with the US Securities and Exchange Commission on Tuesday.
The filing says he will complete the deal provided he gets the debt financing he needs and provided a Delaware court, where he was due to appear in less than two weeks, dismisses the lawsuit filed by Twitter.
In a letter from Mr. Musk’s lawyers, he said: “The Musk parties intend to proceed with the closing of the transaction … and stay the litigation and all other proceedings.”
Twitter and Mr Musk were due to face court later this month as the social media giant tried to hold Mr Musk to his original offer made in April.
“This is a clear sign that Musk understood going into court in Delaware that the chances of winning against Twitter’s board of directors were very unlikely and this $44 billion deal was going to be completed one way or another,” said Dan Ives, an analyst at the investment company Wedbush.
Mr Musk, chief executive of electric car company Tesla, wanted to pull out of the deal because of the number of bot accounts on the platform.
He said that was above Twitter’s estimate of 5% of users, and said in July that it meant he could back out of the deal.
Bots are automated accounts whose existence can lead to an overestimation of how many people are using the website. Knowing the number of real users is important to ad sales and the overall value of the platform.
The acquisition deal was approved by Twitter shareholders last month.
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More than $16 billion worth of Tesla shares were traded by midday in New York on Tuesday, sending the stock down, which recovered in afternoon trading.
Mr. Musk’s proposal could end months of heated litigation that came to a head in Delaware on Oct. 17.
Legal disputes involving senior Twitter executives and texts from Mr. Musk that damaged Twitter’s reputation and the company’s morale were aired.
“I’m sitting on the readings of the company-wide strategy for 2023 and I guess we’re going to collectively ignore what’s going on,” Ruman Chowdhury, Twitter’s director of machine learning ethics, transparency and accountability, told the platform on Tuesday.
In the past, Mr Musk has taken to Twitter to stir controversy, such as offering a “peace plan” for the Ukraine-Russia war, which drew swift condemnation from Ukraine’s President Volodymyr Zelensky.
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1:47 “I would reverse Trump’s Twitter ban”
Mr Musk also said he would lift former US President Donald Trump’s ban on the site.
According to text messages that emerged during the litigation, Mr. Musk planned to change the platform by combating spam by verifying accounts, hosting money transfers, and wanted to build Twitter accounts instead of relying on advertising.
In response to the letter from Mr. Musk, Twitter said: “We have received the letter from the Musk parties that they filed with the SEC. The company’s intention is to close the transaction at $54.20 per share.”
But the trouble is not over for Mr. Musk. Now he needs to raise the money he needs to buy Twitter.
And Tesla shares are under pressure as investors fear it may sell shares to finance the Twitter purchase.
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