Twitter shares soar 13% on reports Elon Musk now wants to proceed with $44 billion bid, just days before trial

Twitter’s stock rose 13% to $47.95, with further upside almost guaranteed if the report by Bloomberg, citing unnamed sources, is accurate and if Twitter accepts the offer. Twitter investors already approved the original deal, priced at $54.20, and antitrust authorities would likely have little cause for objection.

Tesla shares meanwhile sank to their intraday low, up half a percent to $243.60. Investors fear Musk may be forced to liquidate more of his Tesla stock, since the cash-poor billionaire uses the shares as collateral for his personal financing loans on the deal.

Consummating the deal on the original terms without any reduction in price would mean a massive climb down for the Tesla CEO, who instigated a very messy, acrimonious, and public divorce from his original offer to buy Twitter.

Twitter promptly sued Musk at the Delaware Court of Chancery, demanding he honor the contract and cease attacking Twitter’s management over claims they had deceived investors about the number of bots on the service and overstated the number of daily active users. 

Musk pinned his primary defense on allegations that Twitter knew the number of false or spam accounts was more than 5%, as it had claimed, and was therefore a deal breaker. 

Experts argued the Tesla CEO had an uphill battle in store as the Delaware court had a well-established reputation for setting the bar high when it came to pulling out of an acquisition, typically demanding valid contracts be upheld by all parties. 

A five-day trial was set to start on Oct. 17, where Twitter was preparing to argue that it was in fact harsher macroeconomic winds that caused Musk to get cold feet about the acquisition. 

Wedbush tech analyst and Tesla bull Dan Ives said on Tuesday after news of the report broke that the “writing was on the wall he could not win in Delaware,” adding an out-of-court settlement “saves both sides a long and ugly court battle ahead.”

Musk had taken to the company’s own platform to enlist the help of his closest associates like David Sacks as well as dozens of Tesla social media influencers to press his case publicly. He also asked the Securities and Exchange Commission to investigate Twitter’s board over the allegedly falsified user numbers.

Twitter’s ex-head of security gave Musk’s case a bit of momentum by blowing the whistle on what he described as the company’s weak governance. But congressional testimony later showed he had no smoking gun that helped Musk prove his allegations against Twitter.

In the end, Musk appears to be surrendering without managing to lower the price tag for Twitter.

Neither Twitter chairman Bret Taylor nor CEO Parag Agrawal has posted a response to the rumors on Tuesday, nor has the company posted anything to its press account or investor relations at present.

The Tesla CEO, meanwhile, who tweeted up a storm on Monday over his proposal for a negotiated settlement that could hand Russia vast swaths of Ukrainian territory it invaded, was silent.