In a hopeful hint that the protracted dispute could possibly be coming to an end, it was reported on Monday that Twitter had frozen access to its workers’ equity stock accounts ahead of a forthcoming court-mandated deadline for the termination of Elon Musk’s on-again, off-again $44 billion offer to acquire the social media behemoth.
Why was Twitter’s employee stock account frozen?
According to Bloomberg, Twitter made this week’s modification to its FAQ website for employees to inform workers that they won’t be able to access or trade shares through the Equity Award Center.
Two persons with knowledge of the alteration claim that the page said the modification was made “in anticipation of the closure of the planned purchase of Twitter by a company controlled by Elon Musk.”
According to Bloomberg, the update states that “this freeze permits Schwab to complete the last employee account reconciliation prior to the completion of the purchase.” The individuals indicated that a handful of employees’ restricted stock units are scheduled to vest early next month. Many employees have been looking for work elsewhere and intend to leave once the stock vests, they said.
Bloomberg’s request for comment was declined by a Twitter representative.
So, what exactly is the Twitter deal?
In the most recent episode of an epic saga that has alternately been building and winding down since the beginning of the new year, Musk resurrected his $44 billion bid to purchase Twitter.
This about-face follows months of squabbling that started with Musk buying up company shares in January, followed by an offer to acquire the firm in April, followed by a retraction of the offer on July 8 due to Twitter’s alleged failure to disclose the number of “bot” or phony accounts on the network.
Twitter referred to that argument as “shenanigans” and sued Musk on July 12 in an effort to force him to carry out the agreement or face some extremely severe fines.
A U.S. SEC filing on October 4 revealed that Musk’s legal team had suggested a second chance to Twitter’s attorneys only a few weeks before the start of their legal fight in a Delaware-specialized court. Twitter acknowledged, as expected.
As a result of the transaction, the agreement is reinstated to its original terms, under which Musk would pay Twitter owners $54.20 per share—the amount underlying the $44 billion buyout—in order to liquidate their holdings.
The action against Twitter hasn’t been dropped, despite Musk’s attorneys’ request that all court activities, including his previously planned deposition that was to start on Thursday, be suspended.
The clock began to tick
Even though Twitter’s declaration of a freeze on employee stock account access seems to be a sign that negotiations are moving closer to a conclusion, the Delaware court has given Musk until October 28 to finalize the deal. If that doesn’t occur, the lawsuit—which was initially slated to begin on October 17—is back on, with a probable court date in November.
Industry experts caution that despite all indications of a resolution, Twitter still faces many difficulties.
According to Insider Intelligence analyst Jasmine Enberg, “The transaction will ease some of the short-term uncertainties at the firm, but Twitter is basically in the same spot it was in April.”
“There is still a great deal of ambiguity around Musk’s plans for Twitter and the future of a business whose owner has reneged on his promise to acquire it. And if there’s anything we’ve learned from this drama, it’s that Musk is erratic and that it’s not finished yet.”
With Inputs from KSL & Bgloomber