Twitter stock jumped 3% on Thursday after the company told employees that its deal with Elon Musk is not on hold.Bloomberg also reported that the social media company would not renegotiate its deal price of $54.20 per share.Musk recently tweeted that his deal to buy Twitter was “on hold” as he gets to the bottom of how many fake accounts are on the platform. Loading Something is loading.
Twitter stock spiked as much as 3% on Thursday after Bloomberg reported that the social media company told employees its deal to be acquired by Elon Musk is moving forward as planned.
That’s despite several tweets from Musk over the past week saying he put the deal “on hold” as he assessed how many fake bot accounts are on the platform. Twitter says about 5% of its accounts are fake, while Musk believes that number is closer to 20%.
There is “no such thing as a deal being on hold,” Twitter’s top lawyer Vijaya Gadde told employees during the meeting, according to Bloomberg. Additionally, Twitter said that it wouldn’t renegotiate on the deal price, which currently stands at $54.20 per share, or about $44 billion.
Musk could be getting cold feet to purchase Twitter, or he may want to lower the purchase price given that Tesla has erased more than $400 billion in market value amid the ongoing market slump. Musk has planned to put up more than $10 billion of his Tesla stake as collateral to obtain financing to buy Twitter.
If Musk walks away from the deal, which could be difficult because he signed a contract, he would owe Twitter $1 billion in breakup fees. Musk could be trying to avoid paying that breakup fee by arguing that Twitter has more bots on its platform than it had originally said.
But Twitter seems firm in its stance that Musk is set to buy the company at its agreed upon price. Twitter CFO Ned Segal told employees during the meeting that Twitter executives are still engaging with Musk and his team, working with them “regularly” to close the deal, according to the report.
While Twitter hasn’t wavered in its goal to seal the deal, the stock market doesn’t think it will happen, based on the large spread between the agreed upon purchase price and what Twitter stock currently trades for. On Thursday, shares were 30% below the $54.20 deal price.
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