Twitter shares fell 11.3% on Wall Street on Monday as Elon Musk publicly mocked the social network after it ditched its plan to buy the platform for $44 billion, a move that opens the door to a legal battle.
The company’s title ended up at $32.65 on the New York Stock Exchange, 40% less than what the billionaire offered when he announced his intention to get his hands on Twitter in mid-April.
The board of directors of the social network, which initially had no plans to sell at all, accepted his offer a few days later. But after several months of twists and turns, Mr. Musk announced in a Twitter message on Friday that he was ending this agreement, arguing that the company had not honored its commitments by not declaring the share of fake accounts and spam. .
Twitter claims that the number of non-original accounts on its platform is less than 5%, a figure disputed by the billionaire who considers it much higher.
To justify his abdication, Mr. Musk also cites several recent decisions taken by Twitter such as a hiring freeze, contrary to his commitment to the company to continue operating as normal. The reasons given by the entrepreneur do not legally justify breach of contract, however, many specialists argue.
The two are now embroiled in a legal dispute that could cost Musk a few billion dollars if he loses.
According to several American media outlets, Twitter joined the services of the New York law firm Wachtell, Lipton and Rosen & Katz. This same company had represented the California group after Mr. Musk’s presentation in April, when the board initially chose to resist the project before it was submitted to him. Asked by AFP, Twitter declined to comment.
For his part, Mr. Musk shared his first reaction on Twitter on Monday since announcing his withdrawal by posting a picture containing several pictures of him appearing funny.
“They said I can’t buy Twitter. Then they refused to reveal fake account information. Now they want to force me to buy Twitter in court. Now they have to reveal fake account information,” can we read next to each shot. Soon after he posted a photo of actor Chuck Norris winning at chess, accompanied simply by the phrase “Chuckmate”, a pun on “checkmate” and the actor’s name.
Dan Ives of Wedbush Securities said: “This is a ‘very dangerous’ situation for Twitter and its board as the company engages in a Game of Thrones-style legal battle to salvage the deal. Or recover at least $1 billion in severance payments.” The analyst adds : “We don’t see any other notable bidder at this time as legal proceedings are about to begin in court.”