Twitter’s share price plummeted on Monday as Elon Musk released a rebellious commentary ridiculing the upcoming court battle after abandoning the $ 44 billion acquisition of social media giants.
The microblogging platform’s share fell 11.3% to $ 32.65, and analysts say the withdrawal of Mask puts the company vulnerable at difficult times for its core business.
After weeks of intimidation, Musk unplugged the deal on Friday in a “misleading” statement about the number of fake accounts, according to a letter from his lawyer included in U.S. Securities Filing. I blamed Twitter.
In his first public statement since the announcement, Musk went to Twitter late Sunday night and trolled the company after saying he would sue to execute the deal.
“They said I couldn’t buy Twitter. Then they wouldn’t disclose bot information. Now they want to force me to buy Twitter in court. Now they disclose bot information in court. Must be, “he wrote in a tweet. Of the four statements with a photo of the mask laughing with joy.
In the second tweet, an image of martial arts star Chuck Norris was displayed behind the chess board, and the mask was captioned as “Chuck Mate.”
According to Securities Filing, Twitter provided its own new counter-argument late Monday, with a letter from its legal team calling on Musk’s lawyer for Tesla’s boss’s reason to end the transaction “invalid and illegal.” Announced.
“Twitter complies with contractual obligations, including the obligation of Mr. Musk and other Musk parties to use their reasonable best efforts to complete and make the transaction intended by the contract effective. I demand that you do, “said Lipton’s Wakutel Twitter lawyer. , Rosen & Katz.
The termination of the acquisition deal signed by Musk in April sets the stage for a potentially long court battle with Twitter, which opposes dealings with initially unpredictable millionaire entrepreneurs.
The original merger agreement included a $ 1 billion split fee.
Twitter defended the surveillance of fake accounts and said it would sue Mask to force the transaction to complete.
According to social networks, the number of fake accounts is less than 5%, which is challenged by billions of billionaires who believe that percentage is much higher.
S & P Global Ratings said Mask’s latest move “provides multiple downside risks” to Twitter, pointing out the instability of corporate earnings associated with advertising given the increased risk of recession.
Rating agencies said there was a risk even if the $ 1 billion split fee was successfully recovered.
S & P said, “Split fees can be credit positive, but negative advertising can undermine Twitter’s relationship with its advertisers, employees and investors in all possible scenarios. I think there is. “
Public disputes have continued in recent weeks after Musk amplified the issue of fake accounts, and some analysts speculate that he is calm about the deal and his political agenda. Has gathered criticism from progressive advocates who are concerned about.
Behavior that violates Musk’s norms was of little surprise to the long-time observers of Tesla and SpaceX’s chiefs.
Some market watchers predicted that it would collapse shortly after the deal was announced, while others saw a way forward on Monday, even after the latest events.
Morningstar analyst Ali Mogarabi said, “Both parties are likely to face a long battle with very uncertain final decisions, but Twitter may be stronger. I have. “
“I also think there are still scenarios where Mask and Twitter reach a new low-price agreement.”
However, Mogarabi lowered the Twitter stock quote from a mask bid of $ 54.20 to $ 47.
“This is a’code red’situation for Twitter and its board, and the company will face Mask head-on in the Game of Thrones court battle,” said Dan Ives, an analyst at Wedbush Securities.
“At this point, no other bidders are coming out while the proceedings are proceeding in court,” he said.
Briefing.com called the collapse of the mask deal “the worst scenario for the company in the short to medium term,” and said Twitter “the future is at a loss and creating a massive distraction.”