Twitter (TWTR) shares plunge after Musk nixes deal

July 12, 2022 03:01 AM AEST | By Mridul Gogoi

Image source: © Grejak | Megapixl.com

© Jcjgphotography | Megapixl.com

Investors bracing for more upheavals

As Twitter is now getting ready to take Musk head-on at the legal turf, investors fear more disruptions ahead, with a US$1 billion breakup fee on the line.

According to Twitter Chairman Bret Taylor, the company will pursue a legal course to close the transaction “on the price and terms” Elon Musk agreed to.

Twitter has hired merger-law goliath Wachtell, Lipton, Rosen & Katz, planning to file the suit this week.

Twitter has denied Musk’s claims, saying bots are less than 5% of the total subscribers. Twitter executives maintained that their estimates were accurate.

Market strategists talking to Bloomberg said it would be a huge win for the Tesla chief executive to walk away by paying US$1 billion.

Investors will closely look at Twitter’s quarterly earnings later this month, on July 28. The company’s first-quarter earnings reported a revenue of US$1.2 billion but missed analysts’ estimates amid a slowdown in advertising.

Bottom line:

From the beginning, the Twitter deal was embroiled in controversies, with many volleys exchanged between Musk and Twitter executives, including its CEO Parag Agrawal. The bone of contention was the fake accounts on Twitter, which drew a lot of flak from the Tesla executive. Many saw this legal war coming from the exchanges between Musk and Twitter.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.