Friday, July 8, Elon Musk has signified in writing that he was withdrawing his offer to purchase. The battle will now be legal. Since the takeover offer in April, the title of the social network has fallen 29% on Wall Street.
Twitter’s stock was rocked Monday on Wall Street as Elon Musk openly mocked the social network after it abandoned plans to buy the platform for $44 billion and the group braces for a legal battle.
The title of the microblogging site dropped 5.65%, to 34.41 dollars around 1:00 p.m. GMT, in electronic trading preceding the opening of the official session.
He had already lost 5.10% on Friday and 29% in total since April 25, when the group’s board of directors accepted the takeover offer from the entrepreneur, already boss of Tesla and SpaceX.
But after several months of twists and turns, Mr. Musk let it be known in a letter to Twitter on Friday that he was terminating this agreement, considering that the company had not respected its commitments by not communicating the share of fake accounts and of spam.
The social network claims that the number of inauthentic accounts is less than 5%, a figure disputed by the multi-billionaire who considers it much higher.
To justify his renunciation, Mr. Musk also invokes several recent decisions by Twitter such as the recruitment freeze, contrary to his obligation for the company to continue to operate normally.
The reasons given by the entrepreneur do not justify a breach of contract, however, several specialists argue.
The two sides are now engaged in a legal tussle, which could cost Mr. Musk a few billion dollars if he loses.
According to several American media, Twitter has joined the services of the New York law firm Wachtell, Lipton, Rosen & Katz. This same firm had represented the Californian group just after Mr. Musk’s offer in April, when the board of directors had initially chosen to resist the project before submitting to it.
Asked by AFP, Twitter did not immediately confirm this information.
For his part, Mr. Musk shared his first reaction on Twitter on Monday since the announcement of his withdrawal by posting an image containing several photos where he appears hilarious.
“They said I couldn’t buy Twitter. Then they refused to reveal the information about the fake accounts. Now they want to force me to take over Twitter in court. Now they are forced to reveal the information on the fake accounts”, can we read next to each snapshot.
He soon after posted a picture of actor Chuck Norris winning at chess, simply with the phrase “Chuckmate” on it, a pun between the phrase “checkmate” and the actor’s name.
Wedbush Securities’ Dan Ives said, “This is an ‘extremely dangerous’ situation for Twitter and its board as the company takes on Musk in a Game of Thrones-style legal battle to save the company. transaction or recover at least the $1 billion severance pay.”
“We do not see any other bidder standing out at the moment as the legal proceedings are about to begin in court,” adds the analyst.
Morningstar analyst Ali Mogharabi, however, believes that at the level the stock is currently trading, “other parties may be interested in Twitter.”
There is always the scenario where Elon Musk ends up buying the site, but at a renegotiated lower price, he adds in a note.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.