Twitter stock soared Tuesday amid a report Elon Musk has sent a letter proposing to proceed with his offer to buy the social media company for $54.20 a share, according to a Bloomberg article.
Musk, the CEO of Tesla, initially made the $44 billion buyout offer to Twitter in April. Musk stumbled through a series of efforts that sought to lower the price of the deal for various reasons. Twitter said no on all accounts.
Twitter stock soared 22.2%, closing at 52 on the stock market today.
The machinations come as Musk was scheduled for a deposition this week. Following that, he and Twitter were to go head-to-head in an Oct. 17 trial in the Delaware Court of Chancery.
Move Lifts Weight On Twitter Stock
"This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely," Wedbush analyst Dan Ives said in a report to clients.
Initially, Musk brushed off company management and its board of directors and appealed directly to shareholders. But the board agreed to the deal on April 25.
Then Musk announced plans to pull out, and was accused of repeatedly disparaging Twitter to put downward pressure on its stock price. That led to legal action and the upcoming trial.
"We see minimal regulatory risk in this deal although now Musk owning the Twitter platform will cause a firestorm of worries and questions looking ahead among users and the Beltway," Ives said.
Ives rates Twitter stock as neutral.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
