Washington (US), July 12: Twitter Inc shares witnessed a sharp decline after Tesla CEO Elon Musk terminated $44 billion (USD) takeover deal, setting the stage for a legal battle.
Shares currently stand at $33.31 each, significantly lower than Elon Musk's offer of $54.20 per share, according to FactSet data published by The Wall Street Journal on Monday, The Hill reported.
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The shares of Twitter are now lower than they were in April, when Elon Musk acquired his initial 9 per cent stake in the company. The shares of Musk-owned automotive company Tesla have also fallen by 27 per cent since its CEO's announcement that he would buy Twitter, larger than the overall 10 per cent drop in the S&P 500 over that period.
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The shares of Twitter are now lower than they were in April, when Elon Musk acquired his initial 9 per cent stake in the company.[/caption]
Moreover, the social media platform is contemplating legal action against Elon Musk over his decision to terminate a $44 billion takeover deal.
Musk ridiculed Twitter for initiating a legal battle to force him to purchase the company.
Musk tweeted four images of him laughing, "They said I couldn't buy Twitter. Then they wouldn't disclose bot information. Now they want to force me to buy Twitter in court. Now they have to disclose bot information in court."
The microblogging site has hired a large New York-based law firm Wachtell, Lipton, Rosen & Katz LLP as it prepares to sue Musk. Twitter will file its lawsuit in Delaware next week.
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The microblogging site has hired a large New York-based law firm Wachtell, Lipton, Rosen & Katz LLP as it prepares to sue Musk.[/caption]
Meanwhile, Elon Musk is being represented by the law firm Quinn Emanuel Urquhart & Sullivan. On Saturday, Bret Taylor, Twitter's chairman said, "The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery."
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Elon Musk announced the termination of a $44 billion Twitter purchase deal in a letter sent by Musk's team to Twitter earlier on Saturday. Musk decided to suspend the deal due to multiple breaches of the purchase agreement.
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Elon Musk[/caption]
In April, Musk reached an acquisition agreement with Twitter at $54.20 per share in a transaction valued at approximately $44 billion. However, Musk put the deal on hold in May to allow his team to review the veracity of Twitter's claim that less than 5% of accounts on the platform are bots or spam.
Back in June, Elon Musk had openly accused the microblogging website of breaching the merger agreement and threatened to walk away and call off the acquisition of the social media company for not providing the data he has requested on spam and fake accounts.
Musk alleged that Twitter is "actively resisting and thwarting his information rights" as outlined by the deal, CNN reported, citing the letter he sent to Twitter's head of legal, policy and trust, Vijaya Gadde.
Musk demanded that Twitter turn over information about its testing methodologies to support its claims that bots and fake accounts constitute less than 5 per cent of the platform's active user base, a figure the company has consistently stated for years in boilerplate public disclosures.
-PTC News
