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 company fell about 7%, to 34.24 dollars at the start of the New York 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.
Read also: Elon Musk against Twitter, (possible) end of the story
But after several months of twists and turns, the entrepreneur 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 micro-blogging service claims that the number of inauthentic accounts is less than 5%, a figure disputed by the multi-billionaire who considers it much higher.
A legal tussle
To justify his renunciation, Elon Musk also invokes several recent decisions by Twitter such as the recruitment freeze, contrary, according to him, to the 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 camps are now engaged in a legal standoff, which could cost Elon Musk a few billion dollars if he were to lose.
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 Elon 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 declined to comment.
Also read: The four lessons of the Elon Musk-Twitter fiasco
For his part, Elon 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 photo of actor Chuck Norris winning at chess, simply accompanied by the phrase “Chuckmate”, a pun on “checkmate” and the actor’s name.
“Extreme danger” for Twitter
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.
The probability that Twitter will not fall into the hands of Elon Musk and remain listed on the stock exchange is 80%, judges for his part Angelo Zino of CFRA, while there is a 20% chance that the company will be taken out. of the New York market and bought for a lower amount.
“Business prospects and share value are in a precarious situation,” notes Angelo Zino, who refers to “an uncertain advertising market, suffering staff and concerns about the status of fake accounts and strategic direction”.