Shares in Twitter are after tumble Elon Musk abandoned his $44 billion deal for the social media giant.
On Monday, Twitter’s share price fell $4.16, or 11.3 percent, to $32.65 after news that Musk had terminated the acquisition agreement because the target company “violated” the merger agreement. On Friday, Musk reiterated in a letter to Twitter: the social media giant didn’t provide enough information about its bot and spam accounts on the platform and didn’t give Musk and his team enough data to conduct their own analysis.
Also Monday, Musk posted a meme on his Twitter account mocking the management of the social media platform for threatening to sue him over the deal. “Now they have to disclose bot info in court”, the tweet, including a smiling Musk, read to the billionaire investor’s 101 million Twitter followers.
The sharp fall is seen as a warning that Wall Street investors do not want to see a lengthy legal battle over the Twitter deal. To increase the likelihood of that scenario, Twitter has indicated that it will sue Musk over the broken deal to ensure the transaction goes through on the terms agreed to.
“TWTR remains a difficult situation to forecast/trade, but the agency continues to believe the most likely outcome remains an eventual price cut. Their analysis of expected value, based on a 20 percent chance that the deal will close on the terms of $54.20/share, a 50 percent chance that the price will fall to $44.20/share, and a chance of 30 percent on a failed trade suggests a current TWTR price of approximately $39.50/share,” read a July 9 Jefferies Report issued by Jefferies LLP.
The merger battle could still drag on amid speculation suggesting Musk may want to renegotiate the terms of a potential Twitter takeover to take the company private. Failing that, Musk may be on the hook for paying a $1 billion winding-up fee for walking away from the acquisition.