The company board had initially tried to fend off Musk but reversed course after he detailed how he'd finance the deal.
Twitter shares rose 5.5% to $51.63 on Monday as investors digested the board’s decision. There remains a gap between the share price and Musk’s offer, a signal investors still believe there’s a possibility something fouls up the deal, which the company expects to close later this year.
From start to finish, Musk’s takeover bid lasted less than a month, a remarkably quick pace. On April 4, he revealed he had built up a 9.2% in the company in recent weeks, immediately making him a player in Twitter’s future. Over the next week, Twitter offered him a board seat; he accepted, then turned it down. He followed that up with his $54.20-a-share proposal a week later, though he didn’t detail how he’d pay for it, usually a key point in hostile bids.
“It all came down to no other bidders or white knights emerging in the M&A process and Twitter's Board back was against the wall once Musk detailed his $46 billion in financing last week to get pen to paper on this deal,” says Wedbush analyst Dan Ives. Musk has said the platform needs to dramatically alter course, re-centering itself around uncensored free speech. Twitter has longed enjoyed greater cultural cache than business success, and the stock spent many years languishing before the pandemic and renewed focus around growth partly reignited it.
Twitter will report first-quarter earnings Thursday morning, providing the latest insight on the company’s health and on exactly what Musk has just spent $44 billion on.
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