Shares of Twitter dropped approximately 6 percent in premarket trading this Monday as a legal clash between Elon Musk, and the social media company is supposed to take center stage after the world’s richest person canceled the $44 billion deal.
The chief executive officer of Tesla, Elon Musk, said on Friday that he was going to terminate his deal to buy Twitter as the company had broken several provisions of the merger agreement.
“Twitter is planning to sue Musk as early as this week and force him to complete the acquisition, “people aware of the matter reported.
On Monday, Musk led his first blow at Twitter’s stance by tweeting that the legal fight would lead the company to disclose information regarding the bots and spam accounts in court.
Twitter shares ended up at $36.81 on Friday. They were available at a 32 percent discount to Musk’s $54.20 proposal, as they have been slammed by a double whammy of a slump in the broader equity market and investor skepticism regarding the deal.
“We believe that Elon Musk’s intentions to terminate the merger are more based on the recent market sell-off than… Twitter’s ‘failure’ to comply with his requests,” Jefferies analyst Brent Thill announced in a note.
“In the absence of a deal, we would not be surprised to see the stock find a floor at $23.5”