Twitter Shares Rise After Hindenburg Takes Long Position Amid Legal Battle Against Elon Musk

Elon Musk, chief executive officer at Tesla and heads SpaceX, said on Friday he was terminating the deal because Twitter violated the agreement.

By Reuters | Updated: 13 July 2022 20:51 IST

Elon Musk-Twitter legal face-off is the latest twist in the months long saga in the deal

Highlights

Twitter asked a Delaware court to order Elon Musk to complete the merger
Hindenburg did not elaborate on the threat the lawsuit poses to Musk
Twitter was not immediately available for a comment

Short-seller Hindenburg Research said on Wednesday it had taken a long position in Twitter shares and warned the social media firm's lawsuit against Elon Musk, the world's richest man, could pose a threat to his companies.

Twitter's shares rose about 6 percent to $35.90 (nearly Rs. 2,900) on the news, a day after the company sued Musk for violating his $44 billion deal (roughly Rs. 3,50,290 crore) and asked a Delaware court to order him to complete the merger at the agreed $54.20 (roughly Rs. 4,300) per Twitter share.

Musk, who is the chief executive officer at Tesla and heads SpaceX, said on Friday he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platform.

Hindenburg did not elaborate on the threat the lawsuit poses to Musk, but legal experts have said that from the information that is public, Twitter would appear to have the upper hand.

"We have accumulated a significant long position in shares of Twitter. Twitter's complaint poses a credible threat to Musk's empire," Hindenburg said in a tweet.

Twitter was not immediately available for a comment.

The legal face-off is the latest twist in the months long saga that began after Musk in April bought a stake in Twitter and later offered to buy the company.

Then in May, he put the buyout on hold until Twitter proved that spam bots account for less than 5 percent of its total users, even as he had gathered investors to fund a portion of his deal.

Hindenburg, which earlier had a short position, had said in May that Musk's offer could get repriced lower if he walked away from the deal.

© Thomson Reuters 2022

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