Twitter Inc hit back at Elon Musk yesterday, accusing the world’s richest man of “deliberately” scuttling a deal to acquire the social media platform, just days after Tesla Inc’s chief executive sought to back out of the $44 billion (€43.91 billion) deal.
In a letter to Musk dated Sunday and filed with regulators yesterday, Twitter said it had not breached its obligations under the merger agreement, as Musk hinted on Friday in seeking to terminate the deal. (https://bit.ly/3c2QVoP).
“Twitter demands that Mr Maskbut also its other partners to comply with their obligations in accordance with the provisions of the agreement, including their obligations to use their respective and best efforts for the completion and effectiveness of the transactions resulting from the agreement”, according to the same letter.
The company plans to file a lawsuit against Musk to force him to complete the deal. Musk mocked the threat yesterday when he went on to send out a series of posts on Twitter, joking about the said social media platform and its threat to force completion of the acquisition deal through legal action.
THE Twitter plans to file a lawsuit within the week in Delaware, imgs briefed on the matter told Reuters, as reported by Reuters and relayed by the Athens News Agency.
The company stated in the same letter that the merger agreement remains in force, adding that it will take steps to implement it.
Twitter’s share price fell 11.3% to $32.65 (€32.58), down 40% from the price of $54.20 (€54.09) under Musk’s takeover offer . This is the largest daily decrease in the price of the company’s shares in a period longer than 14 months. The share price subsequently recovered by less than 1%.
Tesla’s stock price fell by about 7%.
Those who sold shares of Twitter yesterday recorded a profit of $148 million based on the adjusted price of the company’s shares, while corresponding profits of $1.3 billion were recorded by buying and selling shares of Tesla (S3 Partners).
“Twitter’s board of directors should consider the potential damage to the company’s employee and shareholder base from the release of any internal data that would be exposed to litigation,” said stock market analyst Mark Zgutovich.
Francis Pileggi, an attorney with Lewis Brisbois in Delaware, said that Musk will release information about the social media platform’s moves to secure financial liquidity in future defenses of his decisions. against Twitter’s lawsuit, alleging that the company falsified the number of fictitious Twitter accounts.
“It would surprise me if he was barred from having access to that information,” Pileggi said.
He argued that if the number of fictitious accounts is several times greater than the 5% rate of Twitter’s estimate, this possibility could lead to negotiations for a reduced acquisition price of the mentioned social networking platform.
Legal experts say the listed social media platform, which has been active for 16 years, has a strong legal case against Musk, but may seek a renegotiation or settlement instead of a protracted courtroom battle.
“We believe that Elon Musk’s intentions to terminate the merger are based in large part on an attempt to sell shares at a lower price and not … on Twitter’s ‘failure’ to comply with his demands,” according to analyst Brent Thiel (Jefferies).
“In the event of not reaching an agreement, we would not be surprised if the price of Twitter’s shares falls below $23.50 (€23.45),” said the same analyst.
Source: News Beast
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