Twitter shares fell on Monday after Elon Musk issued a mocking, defiant commentary about a looming court battle following his decision to abandon a $44 billion buyout of the social media giant. Shares of the microblogging platform fell 11.3 percent to $32.65, with analysts saying Musk’s departure leaves the company vulnerable at a difficult time for its core business. Musk pulled the plug on the deal on Friday, accusing Twitter of making “misleading” statements about the number of fake accounts, according to a letter from his lawyers included in a US securities filing.
Musk took to Twitter late Sunday night in his first public remarks since the announcement 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. Musk captioned a second tweet with “Chuckmate,” an image of martial arts star Chuck Norris behind a chess board.
According to a securities filing, Twitter issued a letter from its legal team to Musk’s lawyers late Monday, calling the Tesla CEO’s grounds for terminating the deal “invalid and wrongful.”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.
The termination of Musk’s April takeover agreement sets the stage for a potentially lengthy legal battle with Twitter, which initially opposed a deal with the unpredictable billionaire entrepreneur. A $1 billion breakup fee was included in the original merger agreement. Twitter has defended its fake account oversight and stated that it will sue Musk to force him to complete the transaction. The social network claims that the percentage of fake accounts is less than 5%, a figure that the multi-billionaire believes is much higher.
According to S&P Global Ratings, Musk’s latest move “carries multiple downside risks” for Twitter, highlighting the vulnerability of company revenues tied to advertising in the face of rising recession risk.