Business

Twitter shares sink after Elon Musk says he can “close” the deal

Twitter Inc. shares were hit on Monday after Elon Musk said the merger deal could be terminated if social media companies continued to refuse to provide the information they requested regarding spam and fake accounts.

Mask said in Letter to TwitterThrough his legal counsel Skadden, Arps, Slate, Meagher & Flom LLP, that Twitter
TWTR,
-2.44%

We repeatedly refuse to provide information on the Twitter platform to help evaluate spam and fake accounts.Tesla, Inc.
TSLA,
+ 0.43%

The CEO said Twitter’s offer to provide details of the test method was the same as denying his request.

“Mr. Musk has made it clear that he has to do his own analysis because he doesn’t think the company’s loose testing methodology is appropriate,” the letter said.

Under the terms of the merger agreement, Mr. Musk said Twitter is obliged to provide information for “reasonable business purposes” related to the completion of the agreement. In addition, Mr. Musk must help Twitter secure the funds needed to complete the transaction, including providing the information he “reasonably” requires. Said.

“As a future owner of Twitter, Mr. Musk has the right to explicitly receive the requested data to prepare for the transfer of Twitter’s business to ownership and to facilitate transaction financing,” Musk said. The letter states. “To do both, you need to have a complete and accurate understanding of the active user base that is at the core of Twitter’s business model.”

Therefore he believes Twitter refuses to provide information He demanded a “clear and material breach” of the merger agreement, “Mr. Musk reserves all rights arising from it, including the right not to complete the transaction and the right to terminate the merger agreement.” Said.

Read more about Mask’s previous threats to end merger agreements..

Read again: If Elon Musk and Twitter do not complete the transaction, one of them will have to pay $ 1 billion..

Mr. Musk said Twitter’s continued refusal to provide information has caused “further suspicions” that Twitter is concerned about Mr. Musk’s discovery.

Twitter’s share price fell 3.3% in the morning trading, but held back a previous 5.2% loss.The stock was trading below about 28% Agreed buyout price $ 54.20 per share.

CFRA analyst Angelo Gino said he continues to believe that Musk is “playing a hard ball.”

“Ultimately, it’s getting harder and harder to imagine a scenario where this isn’t resolved in court,” Zino wrote in a note to the client.

Mask’s latest threat will be a little over a week after he disclosed it Increasing the amount of cash he commits Buy Twitter. It appeared at the time to confirm his commitment to the deal. Twitter’s share price has skyrocketed 6.4% against the backdrop of its disclosure, trading above its pre-rally level.

Meanwhile, Tesla’s share price rose 1.1% on Monday after Musk’s letter was disclosed. The deal that Musk buys Twitter is seen by some investors as a distraction from Musk’s operation of an electric car maker. Potentially encourage him to sell Some of his Tesla stocks.

Twitter’s share price has risen 16.4% in the last three months, while Tesla’s share price has fallen 15.2% and the S & P 500 index
SPX,
+ 0.19%

I lost 4.4%.

Twitter shares sink after Elon Musk says he can “close” the deal

Source link Twitter shares sink after Elon Musk says he can “close” the deal

Back to top button