Tesla and SpaceX CEO Elon Musk proposed buying Twitter at $54.20 per share, leading regulators to halt trading on the social media company’s stock.
Musk made the proposal in a letter to Twitter executives, according to a Tuesday report from Bloomberg. Share prices surged as much as 18% on the news. The offer would value Twitter at approximately $44 billion.
Twitter had been battling Musk in court over his attempt to cancel the offer over a dispute about the platform’s true number of users. Musk had expressed concerns that the actual share of fake accounts on the platform could range as high as 33% rather than the company’s reported 5%, with a lower number of monetizable daily active users justifying a lower valuation. A trial to determine the status of the acquisition had been scheduled for October 17.
Twitter attorneys had contested Musk’s rationale for rescinding the $44 billion deal by producing text messages he sent to Michael Grimes, an executive at investment bank Morgan Stanley, indicating that he was concerned about macroeconomic conditions stemming from the Russian invasion of Ukraine. “Let’s slow down just a few days. Putin speech tomorrow is extremely important,” Musk said. “It won’t make sense to buy Twitter if we’re heading into World War III.”
Twitter reported losses of $0.08 per share in its second quarter earnings, falling below the $0.14 gain per share forecasted by analysts. The rough quarter was attributable to “advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk,” the company said in a press release.
Kathaleen McCormick, the Delaware judge overseeing the merger, recently granted attorneys representing Musk permission to use the whistleblower account of Peiter Zatko in their arguments. The former cybersecurity czar for the social media company claimed that executives did not have the resources or motivation necessary to determine the true number of fake accounts on the platform.
Zatko also alleged in his whistleblower report that one or more current Twitter employees are working for a foreign intelligence agency. He explained during testimony before the Senate Judiciary Committee last month that executives were “unwilling to put the effort in” to root out the individual. As Zatko’s testimony was broadcasted live, Musk tweeted an emoji of movie theater popcorn, apparently indicating that he was enjoying the direction of the proceedings.
“I did not make my whistleblower disclosures out of spite or to harm Twitter; far from that,” Zatko explained. “I continue to believe in the mission of the company and root for its success. But that success can only happen if the privacy and security of Twitter’s users and the public are protected.”
Jack Dorsey, the former CEO of Twitter, was recently deposed by both sides of the merger lawsuit. A longtime friend of Musk, Dorsey has called the world’s richest man and his mission to “extend the light of consciousness” the “singular solution” he trusts to run the social media company.
Earlier this year, Twitter joined other technology companies in attempting to cut costs by pausing hiring and reducing office space on multiple continents. The company’s stock price has fallen from $64.98 one year ago to $47.93 on Tuesday afternoon, marking a 26% decline.