CEM REPORT | Consequent to Elon Musk announcement of his decision to pull out of the Twitter deal, the social media company stock fell by 5.46 percent.
Report from Wall Street shows that twitter stock fell to $34.80 as at 7:05 am (11:05 GMT).
In a letter from his lawyers, a copy of which was filed with the Securities and Exchange Commission, the Tesla Chief revealed, he could no longer go through with the $44 billion deal to buy the social media giant on grounds of “misleading” statements about the number of fake accounts.
Twitter and Musk after signing the deal in April had being in an argument on the number of bot operated accounts which the social network said is less than five percent, but Musk argues that the number is much higher.
His decision sets the stage for an epic court battle of over a billion-dollar breakup fee.
According to several US media, Twitter has hired prominent New York law firm Wachtell, Lipton, Rosen & Katz.
Twitter has however refused to comment.
Musk on hearing Twitter’s action tweeted:
“They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court,” accompanied by pictures of him laughing.
According to Dan Ives at Wedbush Securities,
this is a ‘code red’ situation for Twitter and its Board as now the company will go head to head against Musk in a Game of Thrones court battle.”
“We see no other bidders emerging at this time while legal proceedings play out in the courts.”
