Twitter stock was halted twice, the second time pending news, and rose about 13% in midday trading on Tuesday following news that Elon Musk had proposed moving forward with his deal to buy the company at an originally agreed upon price of $54.20 per share.
Bloomberg and The Washington Post reported on Tuesday that Musk had sent a letter to Twitter proposing to end the deal originally signed, citing people familiar with the negotiations.
Representatives for Musk and Twitter did not immediately respond to a request for comment.
Both sides are preparing for a hearing in two weeks over Musk’s attempt to back out of the $44 billion acquisition deal that led to Twitter suing him. Twitter CEO Barak Agarwal was fired by Musk’s lawyers on Monday, and Twitter’s lawyers had planned to fire Musk as early as Thursday.
Such a deal could end months of contentious back-and-forth between Musk and Twitter that has caused massive uncertainty for employees, investors and users of one of the world’s most influential social media platforms.
According to Josh White, a financial aid professor at Vanderbilt University, Twitter’s board will agree to suspend the lawsuit to move forward with closing the deal.
“The public saga certainly took a toll on them and on the Twitter staff,” White said. “It is best for all parties to close the deal and make a quick and seamless transition. I suspect it will be closed soon.
The story began in April when Musk revealed that he had become Twitter’s largest shareholder. Over the next few months, Musk accepted an offer to sit on Twitter’s board, backed out, threatened a hostile takeover, signed a deal to buy the company, began raising concerns about bots on the platform, and tried to stop it. The agreement led to Twitter suing to enforce the agreement and added the Twitter whistleblower’s claims to its defense.
Musk initially moved to terminate the deal, saying the company had misrepresented the number of spam and fake bot accounts on the platform. Twitter said Musk breached the deal and used the bots as an excuse to get out of a deal he earned buyer’s remorse after a broader market slump that hurt Tesla shares and, by extension, Musk’s personal wealth.
However, many legal experts have said Twitter has a strong case to go to court, and Musk will face a significant burden in trying to prove the company made materially misleading statements in its securities filings or contract agreement.
The lawsuit was the final hurdle to closing the deal after Twitter shareholders voted to approve the deal last month. The deal was originally slated to close this month.
With news of the deal coming to an end, there’s a renewed focus on what Musk’s control means for the social media platform.
Musk has previously suggested a number of potential changes to Twitter, the most important of which are returning former President Donald Trump to the platform and removing permanent account bans. Musk has said he wants to make Twitter more open to “free speech” and may change its content moderation policies.