August 12, 2022

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Twitter shares plunge after Elon Musk closes $44 billion deal

Twitter shares plunge after Elon Musk closes $44 billion deal

In this illustration, Elon Musk’s Twitter account appears on a smartphone screen with the Twitter logo in the background.

Buffalo Junchar | Light Rocket | Getty Images

Twitter Shares sank sharply in pre-market trading on Monday after Elon Musk He said he’s trying Acquisition of $44 billion completed company.

Twitter shares are down 7% in US primary markets, which means a loss of nearly $2 billion in market value from Friday’s closing price. Tesla Shares also fell slightly.

On Friday, Musk’s lawyer notified Twitter’s board of directors of his desire to cancel the deal. The billionaire has disagreed with the number Bots and fake accounts On Twitter she says the company is not being honest about the amount of activity on the service is genuine.

Twitter, on the other hand, says it has given Mask the information he needs to evaluate his claim that spam accounts make up only 5% of monetized daily active users, including the so-called “firehose,” an instant, unfiltered stream of tweets. daily.

Brett Taylor, Twitter’s CEO, said the company would Follow up on legal procedures in the Delaware Royal Court to enforce the Convention.

On Monday, Musk responded by posting a meme mocking Twitter’s management about the failed deal. It contains pictures of Musk laughing alongside text alleging the company is trying to “force” him to buy it in court.

A Twitter spokesperson declined to comment on the meme.

It is likely that the two parties are ready for a protracted court battle, According to lawyers. Musk can also face payment $1 billion dismantling fee to walk away.

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Musk is one of the most popular Twitter users, with over 100 million followers. He has used the social networking site for everything from corporate communications for his various companies to Bashing the statute itself He previously wanted to get it.

Richard Windsor, founder of research firm Radio Free Mobile, said Musk’s desire to “significantly renegotiate” the $54.20 price he agreed to pay for Twitter was likely the reason he pulled out of the deal.

As of Friday, Twitter shares were 32% below Musk’s agreed deal price. While Windsor is not a Twitter contributor, he said that if he was, he would sell now.

“There is still a disconnect between the fundamentals and the stock price,” Windsor told CNBC’s Squawk Box Europe on Monday.

“If you look at some of the sides the tech sector has gone into over the past couple of months, you can put the Twitter valuation somewhere in the $13 range. [billion] to $15 billion which is about 50% lower even than today’s stock price.”