Trading in shares of Twitter was halted Tuesday following a report that Elon Musk has proposed to complete the $44 billion deal to buy the social network at the original agreed-on terms.
Musk made the proposal in a letter to Twitter, offering to close the deal at the $54.20 per share price, Bloomberg reported, citing anonymous sources.
There's been no official comment from Musk or Twitter yet. If Musk has in fact come back to his original buyout price, it indicates that he has concluded that he would likely lose his legal fight with Twitter in trying to back out of the deal.
Twitter has sued Musk, the world's richest individual, seeking to hold him to the terms of the binding agreement in April. Since early July, the CEO of Tesla and SpaceX has been trying to extricate himself from the deal, citing among other objections his allegation that Twitter has been unable to prove its claim that less than 5% of active users represent bots or spam accounts.
Twitter's stock price shot up as much as 18% Tuesday after the Bloomberg report, before trading was halted at about 12:13 p.m. ET.
A judge in the Delaware Court of Chancery has scheduled a five-day trial, starting Oct. 17, to hear Twitter's lawsuit against Musk. Lawyers for Musk have notified Twitter on three separate occasions that he believes Twitter has breached the terms of the acquisition agreement. Each time, Twitter has responded that Musk's objections are "invalid and wrongful."
The Musk team first told Twitter in July that he was exiting the deal because the company allegedly could not prove its claim that spam and fake accounts are less than 5% of active users. In a letter last month, Musk's lawyers cited allegations by with Peiter "Mudge" Zatko - its former head of security who was fired in January - about security deficiencies and other problems at Twitter as additional evidence that the pact to buy Twitter was null. In a subsequent letter to Twitter, Musk's lawyers cited the company's severance payments to Zatko and his counsel totaling $7.75 million, which they claimed violated a provision of the acquisition agreement under which Twitter agreed to not "grant or provide any severance or termination payments or benefits" without first getting approval from Musk.
Musk, a Twitter power user who is famous for sharing memes and jokes on the platform, was originally enthusiastic about the prospect of owning his favorite social network. He had proposed ideas like authenticating all users and charging businesses to use the social network. Twitter's lawyers have alleged Musk got cold feet after his personal net worth dropped with the decline in Tesla's stock price.
Twitter investors obviously want Musk to keep his word and pay the $44 billion he promised. At a special meeting of Twitter shareholders, investors overwhelmingly voted in favor of approving Musk's takeover, which the company noted marked the final closing requirement.
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