Twitter stock was halted twice, the second time for news pending, and rose around 13% in midday trading Tuesday following reports that Elon Musk has proposed to move forward with his deal to buy the company at the originally agreed upon price of $54.20 per share.
Bloomberg and the Washington Post reported on Tuesday that Musk had sent a letter to Twitter proposing to complete the deal as originally signed, citing people familiar with the negotiations.
Representatives for Musk and Twitter did not immediately respond to a request for comment.
The news comes as the two sides have been preparing to head to trial in two weeks over Musk’s attempt to pull out of the $44 billion acquisition agreement, which Twitter had sued him to complete. Twitter CEO Parag Agrawal had been set to be deposed by Musk’s lawyers on Monday, and Twitter’s lawyers had planned to depose Musk starting on Thursday.
Such an agreement could bring to an end a contentious, months-long back and forth between Musk and Twitter that has caused massive uncertainty for employees, investors and users of one of the world’s most influential social media platforms.
Twitter’s board would likely agree to suspend the litigation to move forward with closing the deal, according to Josh White, assistant professor of finance at Vanderbilt University.
“The very public saga has certainly taken a toll on them and Twitter employees,” White said. “It is best for all parties to finish the deal and make a quick and seamless transition. I suspect it will close quickly.”
The saga began in April when Musk revealed that he had become Twitter’s largest shareholder. Over the next several months, Musk accepted and then backed out of an offer to sit on Twitter’s board, threatened a hostile takeover of the company, signed an agreement to buy the company, started raising concerns about bots on the platform, attempted to terminate the agreement, was sued by Twitter to follow through with the deal and added claims from a Twitter whistleblower to his argument.
Musk initially moved to terminate the deal citing claims that the company had misstated the number of spam and fake bot accounts on the platform. Twitter claimed that Musk had breached the deal and was using bots as a pretext to exit a deal he’d gotten buyer’s remorse over after the broader market decline, which also hurt Tesla stock and, by extension, Musk’s personal wealth.
Still, many legal experts have said that Twitter has the stronger argument heading into court, and that Musk would face a significant burden in trying to prove that the company had made materially misleading statements in its securities filings or in the deal contract.
The lawsuit was the final hurdle remaining in the way of the deal getting closed, after Twitter shareholders voted last month to approve the deal. The deal had originally been set to close this month.
With news that the deal could end up closing, attention may once again shift to what Musk’s control could mean for the social media platform.
Musk has previously suggested a series of potential changes to Twitter, the most significant of which could be returning former President Donald Trump to the platform and doing away with permanent account bans. Musk has also said he wants to make Twitter more open to “free speech” and could change its content moderation policies.