Twitter shares surged more than 22% on Tuesday after Elon Musk reversed course and said he was now prepared to buy Twitter for $US54.20 a share, according to a regulatory filing on Tuesday.
The shock news saw Twitter shares close $US52.01, up 22.26%, and helped Wall Street surge for a second day.
The Dow jumped 825.43 points, or 2.8%, to end at 30,316.32, the S&P 500 added nearly 3.1% to 3,790.93, and the Nasdaq was up 3.3% to 11,176.41.
Tuesday’s gains also put the S&P 500 up 5.7% for the week so far.
The Twitter bid and Wall Street’s big surge saw the overnight trading on the ASX 200 futures platform clock up a 107-point gain just after 7am to go with Tuesday’s 242 or 3.75% surge in the local market.
Shares in Tesla, Musk’s main company, rose 2.9% to nearly $US250, a day after they dipped on news that the company’s third quarter car production and deliveries missed forecasts – but were still higher than any previous quarter.
A Twitter deal could happen as soon as Friday, media reports said, 10 days before a long-awaited court action between Musk and Twitter is due to start.
Trading in Twitter shares was halted earlier in the day after Bloomberg reported Musk’s about face to return to his deal to acquire the company for $US44 billion.
The SEC filing says Musk sent a letter to Twitter on Monday, notifying the company of his intent to proceed with the transaction agreed upon on April 25, the day the deal was announced.
A few weeks after Musk agreed to that deal, valuing Twitter at $US44 billion, he quickly tried to back out, officially informing the company in July of his intentions to end the agreement.
Twitter sued Musk to force him to go through with the purchase. The two sides were scheduled to go to trial in Delaware Chancery Court on October 17.
Musk had claimed that Twitter was misstating the number of “bots” on its service and used that as one of the reasons he was reneging on the deal. He and his lawyers claimed the social media company was misleading investors by providing false numbers in corporate filings with the Securities and Exchange Commission.
Twitter countered, however, that Musk’s assertions of fraud were incorrect and were based on a misunderstanding of the way the company tallies bots and fake accounts on its platform.
Musk also alleged Twitter failed to provide him with the necessary data related to spam and bots, which Twitter denied.
Now all that seems to be in the processing of being put behind both sides and a deal looms. But with the mercurial Elon Musk involved, there’s still time for a change or two to happen.
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Global oil prices jumped on Tuesday for a second day as news emerged that Saudi Arabia and Russia were seeking bigger cuts to global production that reported at the weekend.
Reports Wednesday morning on the eve of the meeting claim the cuts could be between one and two million barrels a day.
Early reports of the result of tonight’s (Wednesday) start of month meeting of the OPEC+ group had suggested the cut could be around half a million barrels a day. Then Reuters reported on the weekend the size of the cut had risen to a range of half a million barrels to one million barrels a day with the size of be sorted out in pre-meeting talks.
Now western media reports suggest the size of the cut will be larger – between one and two million barrels and even higher.
As a ‘concession to western users (AKA the US) the cut could be phased in gradually over the rest of calendar 2022.
The move would probably trigger US countermeasures, including the additional release of oil from the country’s Strategic Petroleum Reserve, analysts said.
The reports saw US West Texas Intermediate (WTI) crude futures jump more than 3% to $US86.30. Brent futures jumped to more than $US91 a barrel but drifted lower by a few cents a barrel in early Asian trading.
Brent crude futures have risen more than 7% since last Friday and US WTI futures aren’t far behind.
Tonight’s meeting of OPEC members plus other producers was hastily called late last week at the cartel’s headquarters in Vienna, with ministers rushing to the Austrian capital for what analysts have billed as the most important gathering in years.
The media reports said Russia’s top energy official, Alexander Novak, is expected to attend and is understood to support a substantial production cut.
