A report that Elon Musk has proposed to buy Twitter at the cost of $54.20 per share sent its stock surging and prompted a temporary halt in trading Tuesday. The proposal, reported by Bloomberg News, would pave the way for the completion of his $44 billion takeover of the company and avoid the continuation of a costly legal battle.
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Musk had agreed to buy Twitter at that price in April before attempting to back out of the deal in July, claiming the social media company had misled him about the number of fake accounts, or “bots,” on the platform. Twitter then sued Musk in an attempt to force him to complete the acquisition, in a court case that was due to go to trial in Delaware on Oct. 17.
Twitter shares spiked by around 15% upon the news before trading was halted shortly after midday on Tuesday as rumors trickled out that Musk had offered to purchase the company.
Under the proposed deal, Twitter will become a private company under the sole control of Musk, who is also the owner of car company Tesla and rocket maker SpaceX.
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Twitter shareholders approved Musk’s $44 billion offer at a September meeting, which would appear to leave little in the way of the deal being finalized if Musk wishes to proceed.
Twitter shareholders approved Musk’s $44 billion offer at a September meeting, which would appear to leave little in the way of the deal being finalized if Musk wishes to proceed. Twitter is considering the proposal and will not act until Wednesday at the earliest, amid distrust that Musk’s letter offering to close the deal represents a legal maneuver rather than a genuine offer, the Washington Post reported.
One Twitter employee described silence descending on the company’s internal Slack channels as employees digested the news. “We can’t talk badly about the deal or the company or share concerns and fears,” the person told TIME. “The chilling effect is real. The company has made no internal announcement so far, the person said.
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The news Musk has offered to close the Twitter deal came less than a week after hundreds of his personal text messages were made public as evidence in Twitter’s lawsuit, including some showing he knew about the problem of fake accounts on the platform before closing the deal. Some commentators had argued that Musk would struggle to convince the Delaware court that he had been misled on the issue of bots, given that Musk waived his right to further due diligence of the company in April.
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Musk’s plans for Twitter are unclear, but he has previously said that under his ownership Twitter will restrict less political speech, “defeat” spam bots, and “open source” its ranking algorithms. He has suggested that he could allow Donald Trump to reclaim his account on the platform, which was indefinitely banned after Twitter determined the former president to have incited violence on Jan. 6, 2021.
Write to Billy Perrigo at billy.perrigo@time.com.