Elon Musk and Twitter are bracing for a legal battle after the billionaire said he was dropping his $44 billion bid for the social media company. Shares of Twitter slid more than 6% on Monday at the open.
Musk alleged on Friday that Twitter failed to provide enough information about the number of fake accounts it has. However, Twitter said last month that it was providing Musk with a “fire hose” of raw data from hundreds of millions of daily tweets when he raised the issue again after announcing that he would buy the social media platform.
Twitter has said for years in regulatory filings that it believes about 5% of accounts on the platform are fake, but on Monday Musk continued to taunt the company, using Twitter, over what he described as a lack of data.
Musk agreed to a $1 billion severance fee as part of the takeover deal, although it appears Twitter CEO Parag Agrawal and company are preparing for a legal battle to force the sale.
“Look up Twitter, it’s a nightmare scenario…I think it’s going to see, at least in the short term, damaged goods from a public market perspective,” said Wedbush analyst Dan Ives.
The sale of Twitter shares pushed prices below $35 each, a far cry from the $54.20 Musk agreed to pay for the company. This strongly suggests that Wall Street seriously doubts the deal will go ahead.
“The last thing they ever wanted to be was in court with the richest person in the world.” said Ives.
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