Twitter said it is still committed to selling the company to billionaire Elon Musk for the original $44 billion price and provided a detailed chronicle of how the deal came together in a Securities and Exchange Commission filing Tuesday.
“Twitter is committed to completing the transaction on the agreed price and terms as promptly as practicable,” the company said in a statement attached to the filing.
Musk, via tweets, has been casting doubts over the deal in recent days, announcing it is “temporarily on hold,” raising concerns about spam accounts on the platform, and floating the possibility of negotiating a lower price. His pronouncements drove Twitter shares sharply lower to close at $38.32 on Tuesday, well short of the $54.20 he agreed to pay.
The 139-page SEC document shows it all started on Twitter, in March, when Musk was tweeting about the company and its content moderation policies, among other topics. On March 26, he reached out to former CEO Jack Dorsey and the two talked about the future of social media. On the same day, Musk contacted Egon Durban, a Twitter director, and explored the possibility of joining the Twitter board.
On March 27, another meeting was set up, with more Twitter board members, including CEO Parag Agrawal, in which Musk laid out potential options, including joining the board, taking Twitter private or starting a rival service to the social media giant.
Those discussions continued in the next days, as Musk announced he acquired a 9% stake in Twitter, making him the company’s biggest shareholder.
But Musk’s decision to pull back from joining the board appears to have been reached after another discussion with Dorsey on April 5, in which Dorsey told Musk that the company would be better off going private and that he did not intend to stay on the board.
Musk announced his offer to buy 100% of Twitter on April 14.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk is quoted as saying in an SEC filing that day.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk continued. “Twitter has extraordinary potential. I will unlock it.”
Then, after extensive negotiations, Musk and Twitter reached an agreement for him to buy the company at $44 billion on April 25, with Musk pledging to change algorithms and remove spambots.
Dorsey applauded the agreement as “the right path” forward for the company.
“In principle, I don’t believe anyone should own or run Twitter,” Dorsey tweeted on April 26. “It wants to be a public good at a protocol level, not a company. Solving for the problem of it being a company, however, Elon is the singular solution I trust. I trust his mission to extend the light of consciousness.”
The deal includes a $1 billion termination fee if either party backs out, and a specific performance provision allowing parties to seek a court injunction to enforce the agreement, as long as the financing holds.
Still, Musk on Tuesday tweeted that “the deal cannot move forward” until Agrawal publicly shares proof that spam accounts are less than 5% of users on the platform.
Musk has also said he would be open to buying the company at a lower price, because of his concerns over spam accounts, in response to a question at the All-Summit tech conference in Miami on Monday.
Meanwhile, Twitter is going through staffing changes after three more senior employees quit, according to Bloomberg. Two other executives departed last week.
