Twitter shares are on track to erase about US$1.4 billion in market value. Learn more.
Twitter shares have been trading well below the US$54.20-per-share offer Musk made in April. The billionaire alleges that Twitter misrepresented user data, with the number of spam bots on the platform much higher than the company has disclosed. The stock has also been falling along with the tech sector amid rising interest rates.
“It’s not a huge surprise to anyone that Musk is trying to abandon the deal,” said Vital Knowledge founder Adam Crisafulli. “The problem, though, is that this whole saga was probably quite disruptive over the last few months, which could weigh on Twitter’s performance not only in the second quarter but third quarter too.”Article content
With a US$1-billion breakup fee on the line, traders are bracing for more chaos as Twitter takes Musk to court. Twitter Chairman Bret Taylor said the company will pursue legal action in order to close the transaction “on the price and terms agreed by Mr. Musk.” The company has hired merger-law heavyweight Wachtell, Lipton, Rosen & Katz and aims to file suit early this week, according to people familiar with the company’s plans, who asked not to be identified because the matter is private.
Twitter has denied Musk’s claims, saying bots are less than five per cent of the total users, with executives repeating as recently as Thursday that their estimates are accurate.
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