Twitter shares fall after Elon Musk terminates a $ 44 billion deal
In this photo illustration, Elon Musk’s Twitter account is seen on a smartphone screen and the Twitter logo in the background.
Pavlo Gonchar | Lightrocket | Getty pictures
Twitter shares fell sharply in early trading before the market on Monday after Elon Musk said he was trying to end his $ 44 billion takeover of the company.
The company̵[ads1]7;s shares fell almost 9% in US futures markets before being reduced by some losses to trade 7% lower. Tesla shares, meanwhile, rose around 1% in pre-market trading.
On Friday, Musk’s lawyer announced on Twitter that he wants to cancel the deal. The billionaire has taken a problem with the number of robots and fake accounts on Twitter and says that the company is not truthful about how much activity on the service is authentic.
Twitter, on the other hand, says it has provided Musk with the information he needs to assess the claim that spam accounts make up only 5% of revenue-generating daily active users, including its so-called “firehose”, an unfiltered real-time stream. of daily tweets.
Bret Taylor, Twitter’s chairman, said the company would pursue legal action in the Delaware Court of Chancery to enforce the agreement.
Musk responded on Monday by posting a meme that mocked the Twitter management over the incorrect agreement. It contains pictures of Musk laughing along with text claiming that the company is trying to “force” him to buy it in court.
A Twitter spokesperson declined to comment on the memo.
Musk is one of Twitter’s most popular users, with over 100 million followers. He has used the social media site for everything from corporate communications for his various companies to basking in the very platform he previously wanted to acquire.
Richard Windsor, founder of the research company Radio Free Mobile, said that Musk’s “desire to renegotiate the price on Twitter” was probably the reason he left the agreement.
Although he is not a Twitter shareholder, Windsor says that if he were, he would sell now.
“There’s still a disconnect between the basics and the stock price,” Windsor told CNBC’s “Squawk Box Europe” on Monday.
“If you look at some of where the technology sector has gone in the last couple of months, you can put Twitter’s rating somewhere between $ 13 [billion] to $ 15 billion, which is about 50% lower even where the stock price is today. “
