Home Hollywood Twitter Shares Plunge After Elon Musk Ends $44B Deal – The Hollywood...

Twitter Shares Plunge After Elon Musk Ends $44B Deal – The Hollywood Reporter


Shares of Twitter tumbled after Elon Musk walked away from a $44 billion deal for the social media giant.

Twitter shares fell $4.16, or 11.3%, to $32.65 on Monday after news that Musk had terminated the deal, citing the target company’s “violation” of the merger agreement. In a letter to Twitter on Friday, Musk reiterated that the social media giant did not provide enough information about bots and spam accounts on its platform, or enough data for Musk and his team. to do your own analysis.

Also on Monday, Musk posted a meme on his Twitter account mocking the social media platform’s management for threatening to take him to court over the deal. “Now they have to disclose bot information in court,” The tweet, including a laughing Musk, Read to the billionaire investor’s 101 million Twitter followers.

The sharp drop in the stock price was seen as a warning that Wall Street investors did not want to see a prolonged legal battle over the Twitter deal. To increase the likelihood of such a scenario, Twitter has said it will sue Musk over the abandoned deal in an effort to secure the deal.

To heighten the legal risk, Twitter responded to Musk’s July 8 formal notice of abandoning the acquisition by sending Wachtell, Lipton, Rosen & Katz’s own July 11 letter, which claimed the proposed termination was “void and invalid. wrong,” and represents a denial of the agreed terms of the deal.

“Contrary to the assertion in your letter, Twitter has not violated any of its obligations under the agreement, and Twitter has not and is unlikely to suffer material adverse effects from the company. Independent reasons for the agreement, the alleged termination is void…the agreement did not terminate, the bank debt commitment and equity commitment remain in effect and Twitter requires Mr. Musk and other Musk parties to comply with their obligations under the agreement,” Savitt said in a statement via American Securities. said in a letter made public by the Exchange Commission filing.

Twitter’s official response added that “Twitter reserves all contractual, legal and other rights, including the right to specifically enforce Musk’s parties’ obligations under the agreement,” in what could be a prelude to an expected lawsuit.

All of this has left market watchers uncertain about how the protracted legal battle over Twitter will play out and what effect this will have on the company’s stock price.

“TWTR remains an unpredictable/tradable situation, but the department still believes the most likely outcome is still an eventual price cut. Their expected value analysis is based on a 20% chance of closing at $54.20 per share, with 50 A 30% chance of falling to $44.20/share, and a 30% chance of trade failure, suggest the current TWTR price is around $39.50/share,” read the July 9 Jefferies report published by Jefferies LLP.

The merger battle is likely to continue as speculation suggests Musk wants to renegotiate the terms of a potential Twitter acquisition to take the company private. Failing that, Musk could pay a $1 billion breakup fee for walking away from the acquisition.

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