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American entrepreneur Elon Musk sent a letter to Twitter stating he was again willing to buy the social network for the same money he offered last April, before suddenly going out of business. After Musk changed his mind, Twitter had decided to sue him, and a court hearing would have to take place in about two weeks to determine whether the entrepreneur can get out of the contract (possibly having to pay a penalty) or if he’s forced to instead to buy. It’s not yet clear what the process will be like if the deal went through as per the original agreements, but it’s possible that it won’t even go ahead in this case.
This is rather surprising news after months of Musk clashing with Twitter in various ways and widely criticizing the company’s management and the way the social network works. With his contradictory announcements, he had repeatedly caused the value of the company’s shares to rise and fall, which initially seemed very convinced of the takeover, but then reacted very negatively for unclear reasons.
The modalities of Musk’s new engagement, with the sending of a letter from his lawyers, make the operation seem reliable, but newspapers are understandably presenting it with some caution, as Musk has changed his mind on the story several times. Delaying the process and buying time could also be Musk’s strategy, according to some commentators: a Financial Times source close to Twitter argues that this is a concern of the company itself, which is looking to finalize the deal.
The dispatch of the letter was announced by Bloomberg, but the news was later confirmed by a Twitter spokesman with a statement acknowledging receipt of the letter and its contents. The statement also confirms that Musk offered $54.20 per share in the letter, which is the same total value of $44 billion (roughly the same amount in euros) that he proposed last April.
Following Musk’s announcement, the value of Twitter shares rose more than 20 percent to $52: still less than the assumed acquisition price, prompted by investors’ doubts about Musk’s reliability in ending the deal begets
Musk’s intention to buy Twitter has been the subject of much discussion since it became known because of the possible consequences that its realization could have: above all from the point of view of freedom of expression and the coexistence of users in one of the most popular social networks in the world. Musk has been specific about the need to relax content moderation rules — which Twitter has tightened, particularly in recent years — and has complained widely about the social network’s ability to verify user identities and eliminate bots .
In April, he first bought 10 percent of the company’s stock and became one of its largest shareholders, then agreed to buy it all. The board of directors had initially tried to prevent Musk’s takeover, but then accepted the offer, which was nevertheless considered to be very advantageous because it significantly upgraded the company.
In the weeks that followed, operations had suffered several delays, notably from Musk’s repeated threats that he would abandon the purchase if Twitter failed to clear up the number of fake accounts. The company said it couldn’t hand over account details to Musk because doing so would have meant sharing users’ personal information with someone outside of Twitter (i.e., Musk).
However, the dispute over fake accounts seemed to be just an excuse for Musk to get out of the deal, which included a billion-dollar fine, without consequences. In July, Musk announced his formal decision not to make the purchase.
Many commenters had said that Musk had changed his mind after deciding to buy an impulse and that he likely viewed the operation as unsustainable given the major downturn they had suffered in the financial market, particularly the technological one Listen: Twitter had begun to lose value and Musk’s offer, initially seen as generous, had become disproportionate.
Twitter filed a lawsuit against Musk in July, and a Delaware court authorized a summary trial to take place in five days beginning Oct. 17. However, Twitter’s position on the trial seemed more solid given Musk’s flimsy motivations: perhaps that may have influenced his recent change of heart as well.