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In what marks a likely culmination to months of speculative frenzy, Elon Musk is apparently going ahead with his original offer to Twitter.
Bloomberg has reported that Elon Musk intends to consummate the original agreement to acquire Twitter at a price of $54.20 per share, which would value the social media giant at around $44 billion. Musk has formalized this new offer in a letter addressed to Twitter's board.
Twitter shares were halted when this news broke a few minutes back. Currently, the stock is up over 12 percent.
Of course, Elon Musk and Twitter were scheduled to spar with each other in the Delaware Court of Chancery later in October. In light of today's development, however, it remains likely that both parties will withdraw their respective lawsuits against each other.
As we had noted in a post earlier today, Elon Musk's stance vis-à-vis the quantum of bots on Twitter faced two major challenges. First, Twitter's legal team recently disclosed that the two independent experts appointed by Musk to gauge the quantum of bots or fake accounts that populate the social media platform actually negated the claims made by the CEO of Tesla, who at one point had claimed that as much as 90 percent of the engagements on the platform might have been bot-driven. Specifically, Cyabra and CounterAction have now concluded that the quantum of fake accounts on Twitter was 11 percent and 5.3 percent, respectively, in early July.
Second, the social media giant uses monetizable Daily Active Users (mDAUs) as its key criterion to gauge user growth, which is very fuzzily defined in Twitter's own documents. This obfuscation made it extremely hard to gauge the true proliferation of bots on the platform.
In order to legally walk away from the takeover deal, Elon Musk was required to prove that the whistleblower complaint filed by Pieter "Mudge" Zatko, Twitter's security tzar until January 2022, when he was fired for allegedly raising the issue of chronic mismanagement at Twitter, including security lapses, technical shortcomings, and non-compliance with an already-signed privacy agreement with the Federal Trade Commission (FTC), constituted a Material Adverse Effect – a materiality threshold to measure the negative effect of an event on the target business or a contract. Musk also needed to furnish a fraudulent statement by Twitter in relation to the spam accounts. However, as noted by Professor Ann Lipton, the associate dean for faculty research and a Michael M. Fleishman associate professor in business law and entrepreneurship at Tulane University Law School, the likelihood of both of these eventualities remained slim.
We will continue to update this post with additional material details as they become available. Stay tuned!
Update: Elon Musk is Likley to Reactivate Trump's Twitter Account
CNBC is reporting now that Elon Musk and Twitter are likely to close the takeover deal by the coming Monday.
MUSK LIKELY TO REACTIVE TRUMP'S TWITTER ACCOUNT -CNBC
— FXHedge (@Fxhedgers) October 4, 2022
In other news, Musk is now likely to reactivate former US President Trump's banned Twitter account.
As per the reporting by Washington Post, Twitter has still not accepted Elon Musk's offer to close the deal on original terms, citing a lack of trust as the reason behind the social media platform's decision to wait at least a day before conveying a formal response to the CEO of Tesla.