Twitter stock rose by 22% on Tuesday after Elon Musk launched a bid to buy the social media platform at $54.20 a share, which was the original terms of the deal.
According to MarketWatch, Twitter (TWTR, -1.35%) shares jumped 22.2% to $52, making it the second biggest daily percentage gain on record for the company.
The jump came in direct response to an announcement by Musk, who said he plans to go ahead with his offer to buy Twitter. Musk said he believes Twitter has untapped potential and that he can take in the right direction as a private company.
The $54.20 price tag represents an 18% premium over Twitter’s Wednesday closing price of $45.85. It gives Twitter an estimated value of $43 billion.
Musk’s announcement comes as both sides have been prepping for a trial in two weeks over Musk’s attempt to pull out of the acquisition agreement, citing too many bots on the platform which prompted Twitter to sue him.
According to Josh White, who the assistant professor of finance at Vanderbilt University, Twitter’s board of directors is now likely to most suspend their lawsuit against Musk in order to complete the deal.
“The very public saga has certainly taken a toll on them and Twitter employees,” White said. “It is best for all parties to finish the deal and make a quick and seamless transition. I suspect it will close quickly.”
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: PBS.ORG
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