Elon Musk shook the world by making a multi-billion dollar bid for Twitter; however, he halted the transaction due to concerns about the number of bots on the platform.
However, new reports suggest that musk revised the financial plan on Wednesday for the anticipated $44 billion acquisition of Twitter, raising the investors’ hopes that he still intends to complete the deal despite the market turbulence and his distress about the bot accounts on the social site.
Earlier Wednesday, the news overshadowed the annual and regularly scheduled shareholder’s meeting. Although the shareholders did not address the deal openly- they will schedule the vote for an undetermined future date if the deal proceeds.
Twitter’s shares went up 5.5% to a new value of $39.22 in the after-market trade while building on a rise of 3.9% in regular trading.
The economic changes listed in a regulatory filing would reduce up to $6.25 billion from the lending package the Tesla owner had formerly aligned for the platform’s takeover.
Musk will now need to raise that amount in stock commitments rather than debt. It would bring the stock-based equity part of the deal to $33.5 billion, higher than the $27.25 billion mark that musk disclosed a few weeks ago.
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The filings with the Securities and Exchange Commission didn’t reveal more detail about the additional equity that musk will get; however, it suggests that he is trying to persuade the former Twitter CEO Jack Dorsey, who supports the transaction, to roll over his shares.
Dorsey, a co-founder of Twitter, holds a 2.4% stake presently valued at about $700 million, depending on the company’s closing stock price on Wednesday. Musk owns around a 9.6% stake that is worth $2.7 billion.
Dorsey resigned as CEO last November, and Wednesday was his last day at the office and as a member of Twitter’s executive board.
The deal was subjected to much controversy since musk first projected it in April. The share value went below the $54.20 purchase price, signifying that investors had comparatively lower assurance that musk would compete in the deal at that price.
When Elon put the deal on hold for his fear of the fake accounts on the social site as he suggested that the deal should be valued at a lower price due to inauthentic accounts and activity.
Twitter admitted to having these bot accounts, stating in a filing, “We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter.”
On Wednesday, The Twitter shareholders voted against re-electing Egon Durban, Silver Lake co-CEO, to the company’s board of directors. Durban is a long-time backer and an associate of musk’s company and past business transactions.
The new financial plan and valuation of the price can indicate Musk’s now willing to complete the deal.