NEW YORK, United States—Twitter shares plunged Monday as Elon Musk issued a mocking, defiant commentary about a looming court battle after he ditched a $44-billion buyout of the social media giant.
Shares of the microblogging platform fell 11.3 percent to finish at $32.65, with analysts saying Musk’s exit places the company in a vulnerable state at a challenging moment for its core business.
After weeks of threats, Musk on Friday pulled the plug on the deal, accusing Twitter of “misleading” statements about the number of fake accounts, according to a letter from his lawyers included in a US securities filing.
In his first public remarks 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 wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court,” he wrote in a tweet, with each of the four statements accompanied by pictures of Musk laughing with increasing glee.
A second tweet showed an image of martial arts star Chuck Norris behind a chess board, which Musk captioned, “Chuckmate.”
Twitter offered a fresh rebuttal of its own late Monday, releasing a letter from its legal team to Musk’s lawyers that called the Tesla boss’s grounds for ending the deal “invalid and wrongful,” according to a securities filing.
“Twitter demands that Mr. Musk and the other Musk Parties comply with their obligations under the Agreement, including their obligations to use their respective reasonable best efforts to consummate and make effective the transactions contemplated by the Agreement,” said Twitter attorneys at Wachtell, Lipton, Rosen & Katz. AFP
The termination of the takeover agreement Musk inked in April sets the stage for a potentially lengthy court battle with Twitter, which initially opposed a transaction with the unpredictable billionaire entrepreneur.
The original merger agreement contained a $1-billion breakup fee.
Twitter has defended its fake account oversight and said it will sue to force Musk to complete the deal.
The social network says the number of fake accounts is less than five percent, a figure challenged by the multi-billionaire who believes the percentage to be much higher.
S&P Global Ratings said Musk’s latest move “carries multiple downside risks” for Twitter, pointing to the precariousness of company revenues tied to advertising given rising recession risk.
The ratings agency said there was risk from even a successful recouping of the $1-billion breakup fee.
“While the breakup fee could be credit positive, we believe the negative publicity could harm Twitter’s relationships with its advertisers, employees, and investors in all possible scenarios,” S&P said.