Looming Musk-Twitter legal battle drags on company shares

By AP News

Share:

In this article

  • Loading...
  • Want to see what you should be buying? Check out our top picks.

NEW YORK (AP) — Shares of Twitter slid more than 6% before the opening bell Monday after billionaire Elon Musk said that he was his $44 billion bid for the company and the social media platform vowed to challenge Musk in court to uphold the agreement.

NEW YORK (AP) — Shares of Twitter slid more than 6% before the opening bell Monday after billionaire Elon Musk said that he was abandoning his $44 billion bid for the company and the social media platform vowed to challenge Musk in court to uphold the agreement.

Musk alleged Friday that Twitter has failed to provide enough information about the number of fake accounts it has. However, Twitter said last month that it was making available to Musk a "firehose” of raw data on hundreds of millions of daily tweets when he raised the issue again after announcing that he would buy the social media platform.

Twitter has said for years in regulatory filings that it believes about 5% of the accounts on the platform are fake but on Monday Musk continued to taunt the company , using Twitter, over what he has described as a lack of data.

Musk agreed to a $1 billion break-up fee as part of the buyout agreement, though it appears Twitter CEO Parag Agrawal and the company are settling in for a legal fight to force the sale.

“For Twitter this fiasco is a nightmare scenario and will result in an Everest-like uphill climb for Parag & Co. to navigate the myriad of challenges ahead around employee turnover/morale, advertising headwinds, investor credibility around the fake account/bot issues, and host of other issues abound," Wedbush analyst Dan Ives, who follows the company, wrote Monday.

The sell-off in Twitter shares pushed prices below $35 each, far from the $54.20 that Musk agreed to pay for the company. That suggests, strongly, that Wall Street has serious doubts that the deal will go forward.

“This is going to be a long and ugly court battle (Twitter has already hired counsel) ahead in which the fake account/bot issue will be scrutinized for all to see and casts a dark cloud over Twitter’s head in the near term," Ives said.

Share:

In this article:

Industries:
Communication Services
Information Technology
Companies:
Twitter

Author: AP News

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Originally published by Associated Press Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

Sign up for VTM Updates

Form submitted successfully!

VTM Exclusive Reports

Crypto Corner

Learn your NFTs from your BTCs