"Elon Musk Resumes Acquisition" Twitter Stock Surges 22%... Trading Halted Temporarily

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Elon Musk, CEO of Tesla, who had declared the termination of the Twitter acquisition deal, decided to proceed with the original contract again, causing Twitter's stock price to surge more than 22% on the New York Stock Exchange on the 4th (local time).

On that day, Twitter closed at $52 per share, up 22.24% from the previous close on the New York Stock Exchange. The stock price soared on news that CEO Musk would resume the Twitter acquisition, leading to a temporary trading halt for several hours during the session. Twitter's stock, which had been trading around $49 per share in the morning session, jumped more than 20% to around $52 per share shortly before the market closed when trading resumed.

However, this is still below the $54.20 per share price proposed by CEO Musk. CNBC analyzed that the stock price indicates some skepticism remains about whether the acquisition deal will be completed.

According to reports, CEO Musk, who was preparing for a legal battle with Twitter, decided to pursue the acquisition at the original contract price of $54.20 per share. Musk's legal team sent a letter containing this information to Twitter and the Delaware Court of Chancery the day before. This reversal came three months after Musk unilaterally declared the termination of the acquisition deal in July.

Notably, this decision was made ahead of the lawsuit between Musk and Twitter, drawing attention. Earlier, Twitter filed a lawsuit to enforce the contract after Musk unilaterally terminated the deal. The court had scheduled a related trial to be held over five days starting on the 17th.

Locally, it is evaluated that Musk reversed his decision to resume the acquisition because he judged his chances of winning the trial were low. Bloomberg News reported, "Musk may have judged that his chances of winning the trial were too low. From the beginning, legal experts expected Twitter to win the legal battle," adding, "It is very unusual to propose to proceed with the deal under the original terms just before the trial."