After six months of trying wriggle out of his $44-billion agreement to take over Twitter, Elon Musk says he’ll buy the social media platform after all.
On Oct. 4, Musk told the social media company that the deal is back on. In a letter to Twitter, first reported by Bloomberg, Musk said he is willing to go ahead with the deal at $54.20 per share, the original agreed-upon price.
It’s unclear what changed Musk’s mind. Perhaps it was the prospect of a high-profile trial against Twitter, which was due to start in two weeks, or it may be that his latest overture is just a negotiating tactic.
But Musk’s maneuvering doesn’t change the fact that Twitter still has the upper hand in the fight. The company’s stock spiked after news that the billionaire offered to stick to the signed deal, though trading was halted shortly after.
What happens next—whether the case proceeds in court or the suit is dropped—will be up to Twitter. Here are its options:
Is Musk bluffing?
Musk Twitter woes stem from the fact that he signed a merger agreement with a specific performance clause. That means that not only could Twitter sue him for damages if he pulled out of the deal—which the company did after Musk reneged on the agreement on July 8—but that it could also sue to enforce the terms of the deal, meaning a court could force Musk to buy Twitter against his will.
That’s what the upcoming case is set to decide.
Now Twitter has to decide if Musk is pulling a fast one or waving a white flag.
Is the Musk-Twitter trial likely to go forward?
Twitter still has the option to carry on with the trial, set for Oct. 17 in Delaware.
Given the terms of the deal, the outcome of that could very well be the court ordering Musk to complete the deal. His arguments for getting out of it have so far not passed legal muster, according to experts.
First, he alleged that Twitter had misrepresented the number of fake accounts counted in its primary user metric, monetizable daily active users (mDAU) in public filings, even though there was no mention of the issue in the merger agreement. Then, once a whistleblower named Peiter Zatko came forward with allegations of data privacy and security violations, Musk alleged that this constituted a material change to the terms of his contract and used that as a new excuse to get out of the deal.
Musk’s change of heart might backfire
There’s also a chance that Musk’s last-minute proposal to stick by the agreement could backfire. Twitter might not immediately accept this offer is if it thinks it might be a “delay tactic,” said Tulane law professor Ann Lipton. The company might also be after prejudgement interest—meaning Musk would have to pay interest on the agreed-upon fee since his antics have caused a months-long delay.
In the letter to Twitter, Musk’s attorney Mike Ringler conditions the offer on the Delaware court immediately adjourning the trial and staying the case—something Twitter may not do before the deal ha fully closed.
“We received the letter from the Musk parties which they have filed with the SEC,” Twitter said in a statement to Quartz. “The intention of the Company is to close the transaction at $54.20 per share.”
At the end of the day, Musk never had a clear way out of the deal because it was him who suggested it and agreed to it in binding terms. It’s him against Delaware corporate law, against a contract that he signed, and against a version of himself that he came to quickly regret.
So, of course, Elon Musk is buying Twitter. It was his idea all along. Buyer’s remorse was never a good enough excuse.
This article has been updated with a statement from Twitter and additional details about the text of Elon Musk’s letter to Twitter.