The Twitter board announced that Elon Musk, who made a bid of $44 billion for the micro blogging platform, can go ahead to acquire the company. According to a report by the New York Post, Twitter shares reacted to the announcement by gaining just under $1. The shares of the company are currently trading at $38, still much lower than the proposed value of $54.20 that Musk intends to purchase.
The deal seems to have made a headway despite an announcement by Musk that it was on hold. Musk had said that he needed assurances that less than 5% of Twitter users are bot accounts.
Going Ahead With Deal
Days earlier, Musk held a virtual meeting with the employees of the company, a pointer that he was serious about closing the deal. SEC filings show that the deal has been approved by the company’s Board of Directors and may put a seal on it as soon as possible. This puts paid to speculation that Musk wouldn’t buy Twitter at that price. It is also an indication that the review of the Twitter policies and user base demanded by the billionaire businessman has been concluded.
$15.22 Profit For Shareholders
Musk believed that of the 229 million users that Twitter claims to have, that over 20% could be spam bots. With the approval of Twitter board, the shareholders of Twitter would gain $15.22 for each share they own if the deal is sealed today. Jack Dorsey, the founder of Twitter would make $978 million from the deal. Dorsey stepped down as the CEO of the company last year. Dorsey owns 18,042,428 shares or 2.4% of the company.
Change of Control Clause
Parag Agrawal, the current CEO of the company would make $42 million if the transaction is sealed. This is the change in control pay-out clause in the deal document. Parag Agrawal was the Chief Technology Officer (CTO) of Twitter before taking over from Dorsey. Another top executive who would benefit from the change in control clause is the CFO, Ned Segal. He is entitled to $25.5 million.