Twitter Stock Soars While Tesla Shares Tank As Elon Musk Revives $44B Buyout

Key Takeaways:

  • Elon Musk has decided to go ahead with his plans to buy Twitter
  • According to his filing, he is ready to pay his original offer of $43 billion for the company
  • Twitter stock prices rallied while Tesla stock tanked following the news
Twitter Stock Soars While Tesla Shares Price Tank As Elon Musk Revives $44B Buyout
Twitter Stock Soars While Tesla Shares Price Tank As Elon Musk Revives $44B Buyout Image Source: Taneli Lahtinen

YEREVAN (CoinChapter.com) — Days after starting a fresh controversy through his tacit support for Russia in the Ukraine war, billionaire Elon Musk is making headlines again. According to reports, he has agreed to go ahead with his initial plan to acquire social media giant Twitter. As a result, Twitter stock prices (NYSE: TWTR) have started rallying. In contrast, the shares of his electronic vehicles company Tesla have tanked. 

Earlier this year, Musk locked horns with the company’s board of directors after he announced his plans for a hostile takeover. Twitter initially contested his $43 billion generous yet hostile offer, which placed a price of $54.20 per share. 

Elon Musk has changed his mind and wants to buy Twitter again as Twitter(TWTR) stocks rally while Tesla stocks tank
Elon Musk has changed his mind and wants to buy Twitter again.

As CoinChapter reported in May 2022, Musk later put his purchase deal temporarily on hold pending details supporting the calculation that spam/fake accounts do indeed represent less than 5% of users.

Twitter later took the Tesla CEO to court over his refusal to go ahead with his purchase plans. Last month, the company’s shareholders voted to approve the sale of the company to Musk. This, reportedly, had put additional pressure on the world’s richest man. 

Recommended: Ukraine Ambassador asks Elon Musk to “F**k off” after his pro-Russia tweets

Is Elon Musk worried about losing a court case against Twitter?

Perhaps worried about having a weaker case against Twitter in court, Elon Musk is attempting damage control. He has now agreed to pay his original offer price of $43 billion for the company ahead of the October 17 hearing. 

In a confidential letter that Musk’s legal team filed in Delaware Chancery Court, the entrepreneur agreed to go ahead with the purchase pending receipt of the proceeds of the debt financing. In addition, he also stated the end of the legal action as a precondition for going ahead with the plan. 

“We write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein,” 

the letter read. 
Elon Musk, Twitter Stock Soars While Tesla Shares Tank As Elon Musk Revives $44B Buyout

A spokesperson for Twitter also acknowledged receiving the proposal.  As it stands, the company has no objections to selling its shares at the proposed price. 

Twitter (TWTR) shares soar, Tesla shares tank

Seeing that Musk is forced to eat a humble pie, the markets interpreted the news as a win for Twitter. As a result, the company shares rallied over 20%, taking it as high as $52 per share. 

However, while the Twtr Stock price has soared, it remains lower than Musk’s offer of over $54 per share. This indicates that investors are still doubtful about the deal, given Musk’s impulsive decisions. 

Twitter shares have rallied upon news of Elon Musk's renewed acquisition plans
Twitter shares have rallied upon news of Elon Musk’s renewed acquisition plans. Credit: Google Finance

Elon Musk has also hinted that he will start a new platform called “X, the everything app”. What this will come to mean for the future of Twitter is yet to be seen. 

Meanwhile, Tesla stocks price have also tanked. After falling over 8% following its third quarter (Q3) production and delivery report, the Tesla stock price had shown signs of recovery. However, Elon Musk’s agreement to resume his Twitter acquisition plan erased all temporary gains.

Elon Musk wants to create a new app after acquiring Twitter
Elon Musk wants to create a new app.

Tesla investors have already expressed their disagreement with Musk’s Twitter plans. Busy as he is, they fear Musk will not pay enough attention to the company, causing its share prices to fall. 

Moreover, the world’s richest man has sold around $27 billion worth of Tesla stocks to fund his Twitter stock purchase plans. Investors were hopeful that he will direct those funds back into the company after his initial plans failed. 

However, with the deal now back on the table, Tesla investors will hope Elon Musk does not buy Twitter shares. Knowing Musk, another U-turn will be much of a surprise. 

Meanwhile, click here to find out how to protect your tokens from crypto hackers.

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Elon Musk, Twitter Stock Soars While Tesla Shares Tank As Elon Musk Revives $44B Buyout

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