The stock market was shaken once again upon renewed interest in Musk agreeing to Twitter’s deal.
This past Tuesday, news broke out over the internet that billionaire Elon Musk is now offering to buy Twitter at the original price set back in April.
According to CNBC, by the end of that day, Twitter’s shares went up 22%. This is the first time since it was first announced of Musk looking to buy Twitter that its shares have been this high. Currently, the stock market shows that the shares owned by Twitter have remained around the same levels as they were back between April and May based on Google Finances.
Many have questioned why Musk has suddenly decided to pursue the deal again at the original price.
A few experts give some answers. Paul Regan, an associate professor for Widener University Delaware Law School, stated in an interview with CNN that Musk “weighed the considerable inconvenience and arguable misery of his upcoming deposition, and decided enough was enough.”
He went on to say, “That could also include a sober assessment from his own expert witnesses about the strength of the evidence to support his claim that Twitter significantly underestimated the number of bots or fake accounts.”
Another expert, Eric Talley, who is a law professor at Columbia University gave a similar message. He pointed out that the case wasn’t looking as strong as Musk had hoped as stated in an article by PBS NewsHour. “If Musk were to lose the trial, the judge could not only force him to close the deal but also impose interest payments that would have increased its cost,” Talley said.
As of now, the trial has not been canceled but there has been progress of slowing down the trial with this renewed agreement. Reuters reported, “Elon Musk and Twitter Inc (TWTR.N) agreed to postpone the billionaire’s deposition scheduled for Thursday as they try to reach an agreement to end their litigation and close Musk’s $44 billion purchase of the social media company, a source familiar with the litigation said on Wednesday.”
However, this could very well change depending on whether Musk will go forward on his new promise to make the deal happen or try to delay it again. The Guardian summarized this point by stating, “There is a lack of trust, on Twitter’s side particularly.”
It goes on to state, “Both parties have been waging a costly legal battle for several months now, in which Twitter has accused the multibillionaire of being a “model of bad faith” while he has accused the company of running a “scheme” to mislead investors. Twitter said in its recent results that the uncertainty had damaged its financial performance.”
Since Musk can still try to delay the deal, Twitter could push for the trial to take place at the appointed time, Oct. 17, to try and win. If this becomes the case, they can have him pay more than the original deal with interest.
Associated Press wrote that, “The judge presiding over the case said this week that she will “continue to press on toward our trial” because neither side has formally moved to stop it and on Thursday she ordered both sides to wrap up disputes over evidence.”
It went on to explain that Musk has been securing deals to ensure that financially it wouldn’t hurt his companies. Back in August, he sold a couple billion dollars of Tesla’s shares in order to avoid an emergency stock sale if the deal was forced to close.