The title of Twitter, which had lost 4.85% in session on Wall Street following an article by Washington Post indicating that the takeover project was threatened, fell more than 6% in transactions following the markets closed.
The boss of Tesla had threatened to terminate the takeover agreement unless the social network proves that fake accounts represented less than 5% of users who see on its platform, a figure confirmed by Twitter in recent weeks .
However, the multi-billionaire and his team believe that the social network is lying and that this harms the performance of the company and, therefore, the valuation of Twitter.
Last month, Twitter granted Elon Musk access to a repository of raw data on hundreds of millions of daily tweets.
According to the world’s richest man, the company provided incomplete or unusable data, and it appeared that it had counted suspended accounts in its user count that it therefore knew were fake.
Elon Musk’s lawyers also cite the recent layoffs of Twitter employees and the hiring freeze as reasons.
For weeks, experts have wondered if Elon Musk was looking to withdraw his offer or renegotiate the acquisition price downwards.
By terminating his engagement, the businessman exposes himself to legal proceedings.
Moreover, the chairman of the board of directors of Twitter, Bret Taylor, indicated on Twitter that the social networkMusk, and plans to sue him to enforce the deal”,”text”:”agreed to complete the transaction at the price and terms agreed with Mr. Musk, and plans to sue him to enforce the deal respect the agreement”}}”>agreed to complete the transaction at the price and terms agreed with Mr. Musk, and plans to sue him to enforce the deal.
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.
— Bret Taylor (@btaylor) July 8, 2022
Both parties have pledged to pay severance pay of up to $1 billion in certain circumstances.
It’s a dire scenario for Twitter and its administrative board, as the company will now have to face Musk in a lengthy court battle to salvage the deal or recover at least $1 billion.
reacted analyst Dan Ives.
As for analyst Carolina Milanesi, she thinks Elon Musk has compiled a list with as many reasons as possible
to avoid having to pay the fine provided for in the purchase agreement.
Even if the social network emerges weakened from the many adventures of recent months, the worst would be if Twitter forces the acquisition to take place […] They would end up with an owner who does not want the business and [qui a] full of resentment
she thinks.
On April 25, Elon Musk seemed to have won his bet, despite Twitter’s attempts to push him away. The entrepreneur had an agreement with the group’s board of directors to buy the social network at a price of $54.20 per share.
Since then, the title of Twitter has lost more than a quarter of its value. The stock closed Friday’s session at US$36.81, down 5.1%.
Most stocks are having a rough year on the stock market: The New York Stock Exchange index, which Twitter is listed on, has slipped 15% since the start of 2022.
