BackTwitter shares rise by 23 per cent after Elon Musk's U-turn on buyout offer
Shares of Twitter rose 23 per cent to $52 at the close in New York after the tech company confirmed on Tuesday that Tesla CEO Elon Musk had sent a letter saying he would go through the deal he signed early this year to buy the social media firm
PremiumAs soon as Twitter revealed that Tesla Chief Elon Musk will continue with his Twitter buyout deal, its shares surged by 23 per cent to $ 52 on New York Stock Exchange on Tuesday.
The Twitter shares opened at $42 on NYSE on Tuesday. But it didn't take much time for the excited investors to cause the Twitter shares price to jump by 12.7 per cent. However, its shares were halted due to the volatility caused by the development of news. After the resumption of shares at NYSE, tech firm's shares continued to rise and ultimately marked a surge of 23.7 per cent at the end of NYSE.
The official account of the micro-blogging site confirmed the deal in its recent tweet. The tweet mentioned the letter from the Musk parties which they have filed with the SEC. Musk has offered to continue with the old deal and close the transaction at $54.20 per share.
Tesla shares fell by 3%
Twitter shares were not the only ones that were impacted by the news of the finalisation of the deal between Twitter and Elon musk, as Tesla shares slumped by 3 per cent at NYSE on Tuesday. The company's shares opened at $250.75 and registered a low of $ 242.01 on Tuesday. Its shares closed at $249.63 last day.
Twitter-Musk legal battle after the Tesla chief backed out from the $44 bn deal
Ever since Elon Musk announced his back out from the deal with Twitter worth USD 44 billion in July this year, he was indulged in a legal battle with the micro-blogging site. Elon Musk cited the reason for the lack of transparency from Twitter's side behind his back from the deal. He alleged that the micro-blogging site is not revealing information about the number of fake accounts on its platform.
The social firm struck back against Musk just four days later, filing a lawsuit in Delaware Chancery Court with the hopes that Musk would be forced to buy the company.
Fake accounts play a vital role in spreading misinformation and pose a major hurdle for advertisers in selling advertisement to real people. In April, the mercuric CEO had told a Twitter board member -- that "drastic" action was necessary to tackle bots, according to the newly released text messages.
"This is a clear sign that Musk recognized heading into Delaware Court that the chances of winning vs Twitter board was highly unlikely and this USD 44 million deal was going to be completed one way or another," Wedbush analyst Dan Ives as saying.
Meanwhile, Twitter had called out a shareholder lawsuit against Twitter for cancelling his deal and subpoenaing Twitter's former CEO.
(With inputs from ANI)
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