Shares of Twitter Inc (NYSE: TWTR) slid another 5.0% in extended trading on Friday after billionaire Elon Musk announced plans of terminating the $44 billion takeover deal with the social network.
Why is Musk pulling out?
Last week, Twitter reiterated that spam makes up less than 5.0% of its mDAUs.
Still, Musk says he’s pulling out because the communications company blocked access to the “information” needed to verify that “claim” – a reason that CNBC’s Steve Kovach doesn’t seem to buy.
This talk about spam accounts and due diligence and so forth is just a distraction for what he really wants. He either wants out or he wants a lower price.
TWTR is currently trading about 35% below the price that Musk had agreed to pay.
Twitter to pursue legal action
Responding to the development, Bret Taylor – Chairman of the Board at Twitter said the company will pursue legal action to make the billionaire hold up his end of the bargain.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
The terms of the agreement hold Elon Musk liable to pay a break-up fee of $1.0 billion to Twitter if he chooses to walk away from the deal. The NYSE-listed firm is expected to report its Q2 results later this month.
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