The clock is ticking for Elon Musk to complete a deal to acquire Twitter.
Billionaire Tesla CEO has until 5 p.m. Friday ET to close a $44 billion acquisition of the social media platform or face a previously postponed trial, allowing both parties to finalize deal.
A dangerous countdown begins after months of fighting over a takeover that would put the world’s richest man in charge of one of his most influential social media platforms. This acquisition could have a significant impact on the Internet for employees, users and businesses.
Musk agreed to buy Twitter for $54.20 per share outstanding in April and sought to close the deal a few weeks later. He initially cited concerns about the proliferation of bots on the platform, later adding allegations from company whistleblowers. Twitter sued him to go ahead with the acquisition.
The two sides are in the midst of a contentious legal battle that was gearing up for trial to start on Oct. 17, with Musk taking to Twitter to say he wanted the deal to go through at the price originally agreed. The judge overseeing the case, Chancery Court Chief Kathleen St. Jude McCormick in Delaware, will decide whether the parties will reach an agreement by October 28 or go to trial in November.
Weeks after the legal battle was put on hold, Twitter appears to be continuing to take steps to close the deal. Bloomberg reported last week that the company had frozen employee stock accounts in anticipation of a deal, and that lawyers for Musk and Twitter were preparing paperwork to complete the deal. He told shareholders via Twitter that he was “excited” but admitted he had “obviously overpaid.”
But there were doubts over whether Musk’s originally planned funding would come to fruition as hoped, after months of slumping markets across the company, including the company and social media stocks. In addition to raising its own money, it looked to debt and equity financing for the deal; much of it likely came from the sale of Tesla shares.
Some experts have suggested that Musk may need to sell billions of dollars more in Tesla (TSLA) stock to fund the deal, but the company reported last week’s quarterly results. After the announcement, the move became easier for the CEO. Following the recent drop in automaker stock prices.
Days before his deadline, there was also last-minute tension between investors and employees at Twitter.
Bloomberg reported on Friday morning that Biden administration officials had early discussions about the possibility of subjecting some of Musk’s operations to national security clearances, including the proposed acquisition of the social media platform. Twitter’s stock price plunged shortly after it was announced.
Separately, after The Washington Post reported on Thursday that Mr. Musk told potential investors that he planned to cut about 75% of the company’s workforce in the deal, Twitter said it would cut employee jobs. (Musk officials did not respond to requests for comment on this report, citing internal documents and an unnamed person familiar with the matter.)
Musk has previously spoken in private text messages with friends about the drastic reduction in Twitter’s workforce over the deal, revealed in court filings, and said in a phone call with Twitter employees in June
Despite his alleged plan to gut his employees and his own statements that he was overpaying for the company, Musk took to Twitter. I have tried to sound optimistic about the possibilities.
Elon Musk said during a Tesla conference call last week that he outlined several possible product updates and suggested that Twitter would become part of an “everything” app called x, “The long-term potential for Twitter, in my view, is an order of magnitude greater than its current value.”
But if the deal does go through, the most immediate change for users could be limiting Twitter’s content moderation and restoring accounts previously banned from the platform, particularly those of former President Donald Trump.
Read more about Elon Musk
Leave a Comment