From the "poison pill plan" to the official acceptance of the acquisition, within 10 days, Twitter's attitude took a 180-degree turn.
On Monday, April 25, EST, Twitter's board of directors announced a definitive agreement that Musk's wholly-owned entity would acquire Twitter for $54.20 per share in cash, valuing Twitter at about $44 billion. Upon completion of the transaction, Twitter will become a privately held company.
On Monday, Twitter's board said the deal, which was unanimously agreed by board members, is expected to close within this year, subject to approval by Twitter's shareholders and regulators.
Why would Twitter reconsider and embrace Musk's offer?
Too much money was given
Under the terms of the agreement, Twitter's shareholders will receive $54.20 per share in cash upon completion of the transaction.
The purchase price is 38% premium to the closing price on April 1, the day before Musk disclosed that he held more than 9% of Twitter's stake. $54.2 per share is also Musk's initial offer.
In the face of such a generous offer, what reason do other shareholders have to refuse?
Netflix warning
Netflix reported last week that the company lost 200,000 subscribers in the first quarter of 2022 and said it would lose another 2 million subscribers from May to June.
After the earnings report, the company's stock price plunged nearly 40%.
Ackman, a U.S. hedge fund tycoon who wanted to bottom out but was halfway up the mountain, lost $430 million in four months and chose to withdraw from his investment in Netflix with tears in his eyes, saying that he had "lost confidence" in the company's future prospects.
If the deal doesn't work out, Musk could sell his stake, which could trigger a loss of investor confidence and a similar downward spiral in Twitter's stock price.
Previously, Musk has also warned Twitter shareholders that if Twitter declines the offer, it may reconsider its status as a shareholder.
"My offer is my best and ultimate offer, and if it is not accepted, I need to reconsider my position as a shareholder."
Twitter's board decision was to be expected. A number of media outlets earlier on Monday mentioned that people familiar with the matter revealed that Twitter is in the final stage of negotiations on the sale of the company to Musk, and may reach an agreement as early as Monday.
After Musk proposed the acquisition, Twitter's board of directors quickly introduced a so-called "poison pill" plan to resist hostile takeovers in mid-April, but after Musk received a $46.5 billion financing commitment, Twitter's board took a 180-degree turn.
At the end of last week, the media broke that Twitter was re-examining the acquisition offer and would negotiate with Musk on Sunday Eastern Time. This is a sign that Twitter is more receptive to Musk's acquisition.