Twitter Stock Jumps As Elon Musk Commits To Deal At An Original Price

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Shares of Twitter (NYSE:TWTR) jumped more than 22% Tuesday after Elon Musk made a U-turn and informed the social media company, he intends to complete the $44 billion deal at an original price of $54.20 per share.

According to the filing with the U.S. Securities and Exchange Commission (SEC), Musk sent a letter to the social media company on Monday, saying he wants to proceed with the deal, which was first announced on April 25.

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Twitter stock was halted at first after it was reported that Musk intends to close the deal, before racing to trade above the $50 mark for the first time since May. The surge in Twitter shares yielded significant profits to some investors, including the hedge fund manager and activist investor Carl Icahn.

The Wall Street Journal reported that the investor quietly amassed his stake in Twitter to more than $500 million over the past few months and generated a substantial profit after the stock jumped on Tuesday. Twitter shares have remained popular on most stock trading apps, but the volume hasn’t just been from retail. According to estimates, Icahn made a profit of more than $250 million yesterday.

End Of The Saga

The latest development is likely a final chapter in the saga involving Tesla Inc (NASDAQ:TSLA) CEO and Twitter’s board. However, given that the spread between the agreed price and closing price on Tuesday remains over $2 wide, the market is still pricing in a minor risk that the deal could eventually fall apart.

Elon Musk attempted to pull out of the deal just weeks after agreeing to buy Twitter for $44 billion. He officially informed Twitter about his decision to terminate the agreement, after which the social media giant filed a lawsuit to force the billionaire to close the transaction. Musk and Twitter were set to meet in Delaware Chancery Court later this month.

The billionaire accused Twitter of falsely stating the number of bot accounts on the platform, citing it as one of the primary reasons he wanted to back out. Musk and his advisors said Twitter was misleading investors by providing false information in its filings with the SEC.

In the response, Twitter said Musk’s accusations were incorrect and that he misunderstood the way the company counts the number of bot accounts. The social media giant also accused Musk of attempting to drop the deal when the company’s shares slumped amid a broader stock market decline.

At first, Musk tried to delay the trial date, but his request was denied by Chancellor Kathaleen McCormick, saying the move could cause “irreparable harm” to Twitter. However, McCormick allowed Musk and his lawyers to tweak their counterclaim and add certain allegations made by Twitter’s former security chief in a separate whistleblower case.

Twitter shareholders approved Musk’s original offer to buy the company last month.

The X App

While still locked in the court battle with Twitter, Musk hinted in August that he could launch the “X” app to challenge Twitter. In a response to a question about whether he would launch his own social media website, Musk replied only by saying “”.

Yesterday, after he made a U-turn, Musk commented that buying Twitter “is an accelerant to creating X, the everything app.”

These remarks are in line with his comments during his speech at Tesla's annual shareholder this summer.

"I do sort of have a grander vision for what I thought X Corporation could have been back in the day," Musk said.

"It's a pretty grand vision and of course that could be started from scratch but I think Twitter would accelerate that by three to five years."

The new “everything app” could be similar to the Chinese social media platform WeChat. Musk has previously praised Tencent’s app which has expanded from a messaging service to a super app used by over a billion people in China.

He also shared his plans to make Twitter more useful and transform the platform to be more like TikTok and WeChat. The billionaire is an admirer of China-made super apps which provide users with a myriad of features.

Among other things, Twitter mentioned Musk’s plans to create his own social media platform as one of the causes for concern in the lawsuit against him, saying he could be compiling internal data about Twitter in a bid to replicate it.


Elon Musk’s surprising U-turn likely means the saga over the $44 billion deal to acquire Twitter is now over. Twitter stock surged yesterday as Musk committed to a deal at an original price, benefiting investors who made bets on Musk either doing the deal at $54.20 or being forced by a court to complete the acquisition.

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