- $44 billion deal back on after multibillionaire's change of heart
- Shareholders rejoice as stock price jumps 22%
- Musk eyes multi-task app creation similar to WeChat and TikTok
After months of trying to back out and just days before a trial over his reversal, Elon Musk has done another 180 degree flip and now says he's willing to buy Twitter (TWTR:NYSE) after all.
Twitter shareholders should be rejoicing. The multibillionaire plans to move forward with the deal at the original $54.20 a share price, sending the stock shooting 22% higher in overnight trading, giving most the opportunity to get out with a half decent return.
Twitter shares rose nearly $10 to $52, about $4 billion shy of the $44 billion valuation Musk was initially happy to pay.
SHOCK U-TURN
It's yet another surprise turn of events in one of the most contentious acquisitions in recent memory. Since April, the Tesla co-founder has shown buyer's remorse over his $44 billion deal for the micro blogging platform, with an increasingly charged war of words emerging between Musk and Twitter management centred on Twitter's honesty about bot accounts.
Musk officially backed out in July, triggering a lawsuit by Twitter. His proposal to match the initial terms means Twitter again faces a future where the world's richest person, a mercurial multibillionaire who has loudly questioned the company's value, will be the boss.
If the deal finally goes ahead (still a risky presumption, at this stage) it will also end a nine-year run on the stock market for the social media company which has struggled to consistent make a profit from its 400 million-odd global users, half of which are thought to be active on a daily basis.
‘Investors in the social media platform will likely be relieved after enduring considerable volatility in the share price as the takeover saga ran on and legal action loomed,’ said AJ Bell's investment director Russ Mould.
AN ‘EVERYTHING APP’
Musk appears to have some intriguing ideas about how to make Twitter about making Twitter more useful. In his first public remarks since reviving his buyout, Musk called the acquisition ‘an accelerant’ to building a kind of multi-function app, hinting at the creation of something he called ‘X, the everything app’.
Musk has previously mused aloud (usually on Twitter) that he wants it to be more like WeChat, a messaging service that's hugely popular in China, and TikTok, the Chinese-owned video-sharing service that has taken off across the US.
He has drawn parallels to so-called super apps that are widely popular in parts of Asia, letting people use a single smartphone app for a broad range of services, from messaging and other communications to ordering food and summoning a car.
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Steven Frazer) and the editor (Tom Sieber) own shares in AJ Bell.
