By Noel Randewich
(Reuters) – Twitter Inc’s stock surged on Tuesday after billionaire Elon Musk proposed to go ahead with his takeover of the social media platform at $54.20 per share.
Twitter jumped over 22% to end at $52.00 after a securities filing showed Musk intends to go ahead with his April offer of $44 billion to take Twitter private, signaling an end to a legal battle that could have forced Musk to pay up. Musk is also chief executive of electric car maker Tesla Inc.
Tesla gained 2.9% to $249.44, down from an earlier high of $257.50.
Earlier, Twitter’s stock had been halted after a report from Bloomberg News about Musk’s plans.
Over $27 billion worth of Tesla shares were exchanged, the highest turnover for the electric vehicle since mid-August, according to Refinitiv data.
GRAPHIC-Elon Musk vs Twitter
https://fingfx.thomsonreuters.com/gfx/mkt/znvneylmkpl/Pasted%20image%201664901210577.png
Musk and Twitter were set to enter the courtroom this month, with Twitter seeking an order directing Musk to follow through on his agreement last April to buy the company for the agreed-to price. Musk ripped up the deal in August, saying he was misled about the number of spam accounts on Twitter.
Tesla’s stock has been under pressure since Musk agreed to buy Twitter, with investors concerned about how much of the car maker’s shares he might sell to fund the purchase.
GRAPHIC-Musk shields Twitter from social media meltdown
https://fingfx.thomsonreuters.com/gfx/mkt/zjvqkxnmrvx/Pasted%20image%201664904623282.png
The possibility that Musk might follow through on his deal has shielded Twitter’s stock price in recent months from a meltdown in the shares of other social media companies amid a broad Wall Street sell-off over worries about rising interest rates and a weak economy.
With Tuesday’s gains, Twitter is up 20% year-to-date, versus a drop of more than 50% in Facebook owner Meta Platforms Inc .
(Reporting by Noel Randewich in Oakland, Calif.; Editing by Lisa Shumaker and Matthew Lewis)