The Twitter vs. Elon Musk saga may finally be drawing to a close.
After months of legal wrangling, Musk offered to buy the company for the original bid of $44 billion, according to a letter from his lawyers filed with the Securities and Exchange Commission.
Twitter says it intends to sell the company for that amount but stopped short of saying it would drop its lawsuit against the billionaire Tesla CEO.
“We received the letter from the Musk parties which they have filed with the SEC,” Twitter said Tuesday. “The intention of the Company is to close the transaction at $54.20 per share.”
Share surged 22% on the news.
Now that Twitter accepted Musk’s offer to buy the company, what happens next?
Is Twitter a done deal?
“The deal will solve some of the short-term uncertainty at the company, but Twitter is essentially in the same place it was in April,” Jasmine Enberg, an analyst with Insider Intelligence told Associated Press.
“There is still plenty of uncertainty around what Musk intends to do with Twitter, as well as the future of a company with a leader who has wavered in his commitment to buying it," Enberg said. "And if we’ve learned anything from this saga, it’s that Musk is unpredictable and that it isn’t over yet.”
Twitter's advertising business and user base are much smaller than rivals Facebook and TikTok and it's barely been profitable.
"For Musk the irony is the easy part of this deal was buying Twitter, the hard part will be fixing it with monetization and subscriber engagement," Wedbush Securities analyst Dan Ives said in a research note Tuesday night.
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How soon could Musk be in charge of Twitter?
While some logistical and legal hurdles remain, Musk could be in charge of Twitter in a matter of days – however long it takes him and his co-investors to line up the cash, said Ann Lipton, an associate law professor at Tulane University.
The letter from Musk’s lawyers said he would close the deal if the Delaware Chancery Court “enter an immediate stay” of Twitter’s lawsuit against him and adjourn the trial scheduled to start on Oct. 17.
The timing also depends on what the court does, said Steve Reed, a law professor at Northwestern University.
“Some people are speculating that Twitter will ask the court to somehow supervise the merger to make sure that Elon Musk doesn't back out again,” Reed said.
Musk deal would be a win for Twitter
A deal at the original price would be a win for Twitter, said Thomas Lys a professor emeritus at Northwestern University’s Kellogg School of Management.
In April, Musk said he was buying Twitter and then tried to call off the agreement, arguing the company had failed to provide him with information about fake or spam accounts.
The company sued Musk in July to force the completion of the acquisition.
“The cost of this acquisition is now, given the market circumstances, way higher,” Lys said.
The deal would allow both sides to avoid a long and messy trial . As a condition of his offer, Musk asked the Delaware Chancery Court to “enter an immediate stay” of the case “and adjourn the trial and all other” related proceedings.
If Musk buys Twitter at the original price, theoretically, the lawsuit will be settled or dismissed, as Twitter brought the lawsuit to force the sale, said Jessica Silbey, professor at Boston University’s School of Law.
Legal experts and analysts say Musk was going to have a hard time convincing the court that something changed since the April merger agreement that would justify terminating the deal.
"The soap opera now comes to an end with Musk owning Twitter at the original $44 billion price tag after this rollercoaster ride since April," Ives said. "We continue to believe Musk saw the writing on the wall and knew his chances of a victory in Delaware were slim to none with the best path accepting the current deal and move forward."
Musk was scheduled to be deposed by Twitter attorneys on Thursday.
“He made an unsolicited bid, so he was stuck,” Lys said. “And whether he wants to buy it or not, he has no choice. Now he's currently just avoiding legal costs.”
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Will Twitter help Musk build X?
“Buying Twitter is an accelerant to creating X, the everything app,” Musk tweeted Tuesday after his lawyers told Twitter he planned to go ahead with the takeover at the original price of $54.20 a share.
Musk was referring to his vision of creating an app that combines messaging, video, payments and commerce. In recent months, he hinted that Twitter could help build a “super app” like China’s WeChat that people use for, well, everything.
“It’s a pretty grand vision,” Musk told shareholders at Tesla’s meeting in August.
“Obviously, that could be started from scratch,” he said, “but I think Twitter would help accelerate that by three to five years. So it’s kind of like something I’ve thought would be quite useful for a long time. I know what to do. Don’t have to have Twitter for that but, like I said, it’s probably at least a three-year accelerant and I think it’s something that will be very useful to the world.”
What a Musk takeover would mean for users
Musk has laid out his broad plans for changes at Twitter, which would become a privately held company once the deal closes.
"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," Musk tweeted in April. "I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans."
Musk, who has described himself as a “free speech absolutist,” has expressed concern over the way Twitter moderates its users and said the platform should be “politically neutral.” Critics have expressed concern that Musk would allow harmful or extremist speech on the site.
Musk has also vowed to clean up spam accounts on the site.
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Will Musk bring Trump back?
If Musk buys Twitter, he’s likely to reverse a permanent ban against Donald Trump.
Musk has indicated that he would allow Trump back on the social media platform where the former president had more than 88 million followers.
“Would be great to unwind permanent bans, except for spam accounts and those that explicitly advocate violence,” he texted Twitter CEO Parag Agrawal in April, according to recent court filings.
Musk also has a strong financial motive to bring back Trump, who is just the kind of mega-personality who drives engagement on the platform.
Trump lost his direct link to supporters when he was booted from the nation's top social media platforms – Facebook, Twitter and Google’s YouTube – after the Capitol siege. Of the platforms, Twitter was Trump’s favorite. Regaining that bullhorn would be a boon should Trump run for president again in 2024. Trump has continued to falsely claim the 2020 election was stolen.
Trump has said he would not return to Twitter even if invited. In an interview with Americano Media, Trump said in April he would not return because “Twitter’s become very boring.”
“They’ve gotten rid of a lot of good voices on Twitter, a lot of their conservative voices,” he said at the time.
But Trump has not gotten anywhere near the resonance he did on Twitter from his Truth Social app which has a much more limited reach, so some people close to him think Trump will change his mind.
Facebook will decide in January whether to lift Trump’s suspension.
CEO Susan Wojcicki said last year that YouTube would lift the Trump ban “when we determine the risk of violence has decreased.” YouTube declined to comment.
The de-platforming of Trump sparked outrage among conservatives who said Facebook and other major social media platforms routinely censor their speech – a sentiment that Musk seems to share.
“Twitter has become kind of the de facto town square, so it’s just really important that people have both the reality and the perception that they are able to speak freely within the bounds of the law,” Musk said at the TED Conference in Vancouver in April.
Contributing: Associated Press
This article originally appeared on USA TODAY: Elon Musk says he will buy Twitter for $44 billion. What happens now?