Business Twitter shares fall more than 7% after withdrawing its offer to buy...

Twitter shares fall more than 7% after withdrawing its offer to buy Elon Musk

Archive – FILED – 26 April 2022, Bavaria, Kempten: A picture shows Elon Musk Twitter’s acount. Tech billionaire Elon Musk has ended his bid to buy Twitter, citing the allegedly insufficient information provided by the company on fake accounts, according to t – Karl-Josef Hildenbrand/dpa – File

Twitter shares have started this Monday’s session with a drop of more than 7% after Elon Musk confirmed his intention to terminate the purchase contract of the social network, considering that the company failed to fulfill its obligations, including reporting about the number of fake accounts.

In this way, Twitter shares sank 7.4% to $34.09, its lowest price since mid-March and far from the $54.20 contemplated in Musk’s proposal.

In fact, the share price of the social network has only traded above the offer threshold one day after the tycoon confirmed in early April that he had acquired 9.2% of Twitter and not even after launching his offer in mid-April the company’s shares reached the price contemplated in a potential acquisition.

In a letter shared by the tycoon’s legal team, Musk communicated to Twitter last Friday his intention to paralyze the purchase of the social network after having formally requested information related to the number of false accounts found on the platform on several occasions. , as well as Twitter’s way of auditing and suspending them.

Musk had been publicly questioning Twitter’s ‘bot’ numbers for weeks, which many analysts saw as an attempt to drive down the tech giant’s share price.

In mid-May, the tycoon had already temporarily suspended the purchase of Twitter, agreed at the end of last April for some 44,000 million dollars (42,156 million euros), pending details that would support the company’s calculation of that fake/spam accounts represent less than 5% of users.

Subsequently, through a letter sent in early June by Musk’s lawyers to the United States Securities Market Commission (SEC), the billionaire’s legal team considered Twitter’s position a “substantial breach” of its obligations under the merger agreement, warning that Elon Musk “reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.”

For its part, Twitter announced its intention to initiate legal action to enforce Musk’s purchase agreement.

“Twitter’s Board is committed to closing the transaction at the price and terms agreed upon with Musk and plans to initiate legal action to enforce the merger agreement. We are confident that we will prevail in the Delaware Court of Chancery,” the Twitter president said. Twitter board of directors, Bret Taylor.

Musk and Twitter agreed to a 987 million euro ($1 billion) penalty to be paid by any party that backed out of the deal, though if Twitter wants to force the purchase under the agreed terms, things could get tougher for the South African tycoon.

Source: Europa Press

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