Washington [US]: Twitter Inc, shares witnessed a sharp decline after Tesla CEO Elon Musk terminated USD 44 billion takeover deal, setting the stage for a legal battle.
Shares currently stand at USD 33.31 each, significantly lower than Musk’s offer of USD 54.20 per share, according to FactSet data published by The Wall Street Journal on Monday, The Hill reported.
Shares of the company are now lower than they were in April, when Musk acquired his initial 9 percent stake in the company.
Shares of Musk-owned automotive company Tesla have also fallen by 27 percent since its CEO’s announcement that he would buy Twitter, larger than the overall 10 percent drop in the S&P 500 over that period.
Moreover, the social media platform is contemplating legal action against Musk over his decision to terminate a USD 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.
Meanwhile, 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.”
Musk announced the termination of a USD 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.
In April, Musk reached an acquisition agreement with Twitter at USD 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, 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.