Twitter fires back at Musk | Business and economic news

Shares of Twitter on Monday saw its biggest daily percentage drop in more than 14 months, wiping out more than $3 billion in valuation.

Twitter Inc has fired back at Elon Musk, accusing the world’s richest person of “knowingly” violating an agreement to buy the social media company, days after the Tesla Inc chief sought to pull out of the $44 billion deal.

In a Sunday letter to Musk submitted to regulators Monday, Twitter said it had not breached its obligations under the merger agreement, as Musk pointed out on Friday because he wanted to end the deal.

Instead, it accused the Tesla chief of “knowingly, knowingly, intentionally, and materially violating the agreement”.

In the letter, Twitter said the deal was not terminated, adding: “Twitter demands that Mr. Musk and the other Musk parties honor their obligations under the agreement, including their obligations to use their respective reasonable efforts to fulfill the agreement. complete and effectuate any transactions contemplated by the Agreement.”

The company plans to sue Musk to force him to close the deal, a threat he laughed off Monday when he sent a series of tweets joked about Twitter and his threats to enforce the deal in court. Twitter plans to file a lawsuit in Delaware early this week, people familiar with the case told Reuters news agency.

Twitter said in the letter that the merger agreement remained in effect, adding that it would take steps to close the deal.

Twitter shares ended 11.3 percent at $32.65, a 40 percent discount on Musk’s $54.20 bid and the largest daily percentage drop in more than 14 months, erasing more than $3 billion in value . They recovered less than 1 percent in expanded trade.

Shares of Twitter have fallen well below Musk's offer

Tesla’s shares closed nearly 7 percent.

Traders who shorted Twitter’s tumbling shares made $148 million in mark-to-market gains Monday, while short bets against Tesla resulted in $1.3 billion in mark-to-market gains, according to S3 Partners, a technology company. and data analytics company.

“Twitter’s board of directors needs to consider the potential harm to its employees and shareholders from any additional internal data exposed in lawsuits,” said Benchmark analyst Mark Zgutowicz.

Francis Pileggi, a corporate litigation attorney with Lewis Brisbois in Delaware, said Musk could put the social media giant’s so-called “bots” at the center of future lawsuits if he defends Twitter’s lawsuit by claiming the company is reducing the number of fake accounts. misrepresented.

“I’d be surprised if he’s forbidden from getting that information,” Pileggi said.

Pileggi said that if the number of fake accounts is many times higher than the 5 percent that Twitter estimates, it could lead to negotiations on a discounted price for the social media platform.

Legal experts say the 16-year-old social media company has a strong lawsuit against Musk, but could opt for a renegotiation or settlement over a lengthy lawsuit.

“We believe Elon Musk’s intentions to end the merger are based more on the recent market sell-off than … Twitter’s ‘failure’ to comply with its requests,” Jefferies analyst Brent Thill wrote in a statement. note.

“If there’s no deal, we wouldn’t be surprised if the stock bottoms at $23.5.”

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