Twitter Shares Down 5% Today After Musk’s Takeover Termination
- Reportedly, Musk has ostensibly discontinued his plan to take over Twitter over fears of possible legal threats.
- Additionally, Musk claims the actual number of those fake accounts are 5 percent higher than the figures submitted by the board.
Shortly after Elon Musk, a billionaire and founder of Tesla, decided to halt his proposed Twitter Inc. (NYSE: TWTR) acquisition, the company’s shares recorded a single digit drop. According to trading data provided by TradingView, TWTR shares are down by over 5 percent during Monday’s premarket.
Reportedly, Musk has ostensibly discontinued his plan to take over Twitter over fears of possible legal threats.
Musk and Dorsey Play With Twitter
According to findings, the takeover deal took another face after the Tesla founder accused the Twitter board of presenting a deceitful figure of fake accounts running on the platform. Musk claims the actual number of those fake accounts are 5 percent higher than the figures submitted by the board. He insisted the Twitter team manipulated the figures to cover up the accurate statistics in a bid to influence his purchase of the platform. The development, according to him, informed his decision to scrap the $44 billion takeover deal.
Additionally, the Tesla founder via a filing with the U.S regulator accused the Twitter team of failing to fulfill their obligations as spelled out in the deal. He further in the filing noted that the social networking platform is poised to experience severe complications in no distant time.
Previously, Musk temporarily suspended the takeover deal over plans to verify the data presented by the board in May.
Notably, Musk through his team conducted a verification assessment of the presented data. Reportedly, they dawned that the figures of fake or scam accounts in the reported mDAU (monetizable daily active user) count of Twitter is hugely higher than 5%.
With the development, the attorney to the Tesla founder announced that his principal has discovered the huge gap in the figures provided by the Twitter board and the real figures. The alleged insincerity, according to the attorney, is prompting the decision to discontinue the deal.
Twitter Vows To Take Legal Action Against Musk
Following the announcement of the truncation of the deal by Musk, Twitter threatened to pursue a legal battle against the popular billionaire. According to a Friday tweet by Chairman of the Twitter Board, Bret Taylor, the takeover deal with Musk is still on and the board will take legal action to make the deal happen. Taylor insisted that his team will win in the Delaware Court of Chancery.
Worth noting, that the Twitter board intends to get Court’s approval in compelling Musk to complete the takeover deal. Additionally, the board refuted Musk’s claim that they availed misleading statistics of existing fake accounts on the platform. They insisted the figures of existing fake accounts on Twitter are below 5% as presented.
However, as observed in the takeover agreement, Musk is posed to incur a fee of $1 billion if he decides to cancel the deal. Even though the issue has continued to generate a lot of debates, it remains to be seen if Twitter will be able to secure Court’s support to keep Mr Musk in the deal.