Twitter jumps after the company tells employees its deal with Elon Musk is still on and that it won't renegotiate the $54.20 takeover price
- Twitter stock rose 3% Thursday after the company told employees its deal with Musk was not on hold.
- Bloomberg reported the social-media company would not renegotiate its deal price of $54.20 a share.
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 was 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 bot accounts were on the platform. Twitter says about 5% of its accounts are fake, while Musk says he 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 with employees, according to Bloomberg. Additionally, Twitter said it wouldn't renegotiate on the deal price, $54.20 a share, or about $44 billion.
Musk could be getting cold feet, or he may want to lower the purchase price given that Tesla has erased more than $400 billion in market value amid the 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 walked 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 saying Twitter has more bots on its platform than it originally said.
But Twitter seems firm in its stance that Musk is set to buy the company at the agreed-upon price. Twitter's chief financial officer, Ned Segal, told employees during the meeting that Twitter executives were still engaging with Musk and his team, working with them "regularly" to close the deal, according to Bloomberg's 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's stock trades for. On Thursday, shares were 30% below the $54.20 deal price.