Twitter shares plummeted on Monday when Elon Musk made a snarky, defiant comment about a looming court battle after abandoning a $44 billion takeover of the social media giant.
About 60 minutes into Monday’s start of trading, Tesla shares are down 7.0 percent to $34.24.
After weeks of threats, Musk pulled the plug on Friday, accusing the company of “misleading” statements about the number of fake accounts, according to a letter from his attorneys found in a US securities file.
In his first public statements since the announcement, Musk took to Twitter late Sunday night to troll the company after it said it would sue to enforce the deal.
“They said I couldn’t buy Twitter. Then they would not disclose bot information. Now they want to force me to buy Twitter in court. Now they must disclose bot information in court,” Musk wrote in a tweet, with each of the four statements accompanied by images of Musk laughing with increasing glee.
A second tweet featured a picture of martial arts star Chuck Norris behind a chess board, which Musk captioned “Chuckmate.”
Musk’s termination of the acquisition agreement he signed in April sets the stage for a potentially lengthy court battle with the company, which initially opposed a transaction with the unpredictable billionaire entrepreneur.
The original merger agreement included a $1 billion break-up fee.
Twitter has defended its oversight of fake accounts, saying it will force Musk to complete the deal.
The social network says the number of fake accounts is less than five percent, a number questioned by the multi-billionaire who believes the number is much higher.
According to several US media reports, Twitter has hired the prominent New York law firm Wachtell, Lipton, Rosen & Katz. Twitter declined to comment to AFP.
– Still a chance at a deal? –
The latest back-and-forth follows weeks of public bickering between the sides after Musk escalated the fake account issue, with some analysts speculating he got cold feet over a deal announcement that drew criticism from progressive pressure groups who are concerned about Musk’s political agenda.
Musk’s non-normative behavior comes as little surprise to longtime observers of the Tesla CEO, who are accustomed to a steady stream of utterances that flout or challenge convention and sometimes provoke a crackdown from regulators.
Some market watchers predicted the deal would fall apart shortly after it was announced, but others still saw a way forward on Monday, even after recent events.
“While the two parties are likely to face a protracted battle, the ultimate outcome of which remains very uncertain, we believe Twitter may have the stronger argument,” said Morningstar analyst Ali Mogharabi. “We also believe that a scenario remains where Musk and Twitter reach a new, more favorable agreement.”
But Mogharabi lowered his estimate for Twitter shares from Musk’s asking price to $47 from $54.20, saying, “We expect Twitter to likely face distractions that will impact its efforts to grow revenue and margins.” to raise, throw back.”
For analyst Dan Ives of Wedbush Securities, “This is a ‘Code Red’ situation for Twitter and its board as the company now faces Musk in a Game of Thrones court battle.”
“We are currently not seeing any other bidders appearing while court cases are being fought.”
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