Twitter shares take a hit after Elon Musk exits 44 billion takeover deal
1 min read . Updated: 12 Jul 2022, 06:14 AM IST
Premium- Elon Musk announced the termination of a USD 44 billion Twitter purchase deal in a letter to the social media giant last week
Following Elon Musk announcing his decision to terminate USD 44 billion takeover deal, Twitter shares witnessed a sharp decline, setting the stage for a legal battle. According to a report by The Hill citing FactSet data published by The Wall Street Journal on Monday, shares currently stand at USD 33.31 each, which is significantly lower than Musk's offer of USD 54.20 per share.
Twitter shares are now lower than they were in April, when Musk acquired his initial 9% stake in the company. Additionally, the shares of Musk-owned automotive company Tesla have dropped by 27% since Musk announced that he would buy Twitter, larger than the overall 10% drop in the S&P 500 over that period. This development comes at a time when the social media platform is planning a major legal action against Elon Musk over exiting the takeover deal. While Twitter shares closed 11% lower at $32.65, erasing about $3.2 billion in market value, shares in Tesla Inc. fell nearly 7%, according to Bloomberg report.
Notably, Musk is being represented by the law firm Quinn Emanuel Urquhart & Sullivan. While on Saturday, Bret Taylor, Twitter's chairman said, "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."
Elon Musk announced the termination of a USD 44 billion Twitter purchase deal in a letter sent by Musk's team to Twitter earlier on Saturday. Musk decided to suspend the deal due to multiple breaches of the purchase agreement.
In April, Musk reached an acquisition agreement with Twitter at USD 54.20 per share in a transaction valued at approximately $44 billion. However, Musk put the deal on hold in May to allow his team to review the veracity of Twitter's claim that less than 5% of accounts on the platform are bots or spam.
Back in June, Musk had openly accused the microblogging website of breaching the merger agreement and threatened to walk away and call off the acquisition of the social media company for not providing the data he has requested on spam and fake accounts.
(With inputs from ANI)
