Twitter Shares Slide About 6 Percent as Elon Musk’s Suspended Deal Reaches Legal Tussle

Elon Musk said on Friday he was terminating the deal to buy Twitter because the company has breached multiple provisions.

By ANI | Updated: 11 July 2022 17:59 IST

Twitter Shares Slide About 6 Percent as Elon Musk’s Suspended Deal Reaches Legal Tussle

Twitter shares fell as a legal tussle between Elon Musk and the social media company will take place soon

Highlights

Twitter shares fell about 6 percent on Monday
Twitter is planning to sue Musk as early as this week
A legal tussle between Elon Musk and Twitter will take place soon

Shares of Twitter fell about 6 percent in premarket trading on Monday as a legal tussle between Elon Musk and the social media company is expected to take centre stage after the world's richest person walked away from the $44 billion (roughly Rs. 3,49,400 crore) deal.

Musk, the chief executive officer of Tesla, said on Friday he was terminating his deal to buy Twitter because the company had breached multiple provisions of the merger agreement.

Twitter is planning to sue Musk as early as this week and force him to complete the acquisition, people familiar with the matter told Reuters.

How Elon Musk Reacted to Twitter’s Lawsuit Threat

On Monday, Musk took a jab at Twitter's stance, tweeting that the legal battle would lead to the company disclosing information on bots and spam accounts in court.

The series of tweets was Musk's first public response since the Friday announcement.

Twitter shares ended at $36.81 (roughly Rs. 3,000) on Friday and were at a 32 percent discount to Musk's $54.20 (roughly Rs. 4,300) bid, as they have been hit by a double whammy of a slump in the broader equity market and investor skepticism over the deal.

Musk Pulls Out of $44 Billion Deal, Twitter Says Will Pursue Legal Action

"We believe that Elon Musk's intentions to terminate the merger are more based on the recent market sell-off than... Twitter's 'failure' to comply with his requests," Jefferies analyst Brent Thill said in a note.

"In the absence of a deal, we would not be surprised to see the stock find a floor at $23.5 (roughly Rs. 1,800)."

The contract calls for Musk to pay Twitter a $1 billion (roughly Rs. 7,900 crore) break-up fee if he cannot complete the deal for reasons such as the acquisition financing falling through or regulators blocking the deal. The break-up fee would not be applicable, however, if Musk terminates the deal on his own.

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