Twitter Jumps After Musk Increases Commitment Offer To $33.5 Billion
Elon Musk, during an event at SpaceX headquarters in Hawthorne, California, US, on Thursday, October 10, 2019.
Bloomberg / Getty Images
A new filing has revealed that Elon Musk is planning to make $33.5 billion in his bid to acquire Twitter.
Musk is in talks with Twitter founder and former CEO Jack Dorsey and others to help fund or renew their shares to complete the deal. In a letter to investors who support the holding company that Musk is forming to make Twitter private, the CEO of Tesla and SpaceX expressed his commitment to completing the deal.
Twitter shares rose more than 5% after hours on the news, while Tesla shares fell about 1%.
As previously reported by CNBC’s David Faber, Elon Musk is expected to serve as Twitter’s interim CEO for a few months after he completes the $44 billion acquisition.
The deal has been mired in controversy since Musk first proposed it in April, and the shares are trading below the $54.20 acquisition price, indicating that investors have relatively low confidence that the deal will go through at that price.
Earlier in May, Musk sent Twitter shares tumbling when he said he would delay the $44 billion deal while looking at the percentage of fake accounts and spam on the platform. Musk suggested at the All In Summit tech conference in Miami that his Twitter deal should take place at a lower price, likely given his concerns about activity and non-original accounts on the platform.
Twitter acknowledged in its first-quarter earnings report the existence of a number of “fake or spam accounts” on the social network, along with legitimate daily active use or users (mDAUs). The company wrote in a filing, “We conducted an internal audit of a sample of accounts and estimate that the average fake or spam accounts during the first quarter of 2022 represented less than 5% of our MDAU during that quarter.” Twitter has also admitted that it overestimated the number of users by 1.4 million to 1.9 million over the past three years.
earlier on Wednesday. Twitter shareholders have voted not to re-elect Egon Durban, co-CEO of Silver Lake, to the company’s board of directors. Durban, through Silver Lake, is a longtime business partner and supporter of Musk’s businesses and prior business deals.