Twitter shares closed up 8 percent on Wednesday as Wall Street appeared to see a lawsuit against Elon Musk on the company’s behalf.
On Tuesday, Twitter filed a lawsuit against Musk to enforce its $44 billion acquisition of the company. Musk tried to back out of the deal on July 8, saying that Twitter was violating the merger agreement because The company made “false and misleading representations” about the number of bot and spam accounts on the platform.
Twitter, Wall Street and others, however, believe Musk won’t make it.
“It’s now becoming a game of odds/legal analysis as the debate surrounding the Twitter case against Musk begins to influence stocks. We believe many investors have spent the night reading the case and have finally concluded that this Game of Thrones court battle will result in some sort of victory for Twitter,” Wedbush analysts wrote Wednesday.
An investment firm, better known as a short seller, tweeted that it was now taking a long position on Twitter, betting that the company is likely to beat Musk. “We built up a significant long position in Twitter stocks. Twitter’s complaint poses a credible threat to Musk’s empire. he writes Hindenburg Research, a company founded by Nate Anderson.
Musk agreed to buy Twitter on April 25, 2022. His offer of $54.20 per share was 38% above Twitter’s stock price at the time. Since then, the broader market has plummeted, as have Tesla stock, which Musk used as part of the funding for the Twitter deal.
Twitter argued in its complaint that the stock market crash was what prompted Musk to back out of the deal.
“Having made a public demonstration of activating Twitter and proposing and signing a merger agreement with a vendor, Musk seems to believe that, unlike all parties subject to Delaware contract law, he is free to change his mind, get rid of of the company, stop its operations”. , destroy shareholder value and walk away,” the complaint read.
Twitter stock has also dropped recently, dropping 20% in the last three months. Shares closed at $37 on Wednesday.
As part of the deal, Musk also agreed to a $1 billion breakup fee if the deal doesn’t go through, which some argue could come into play here.
“Various possibilities may emerge from the Delaware court, including settlements, breach rates, settlement enforcement, and a host of other outcomes,” Wedbush analysts wrote. “For now, Twitter shares will continue to trade independently (with some added value from the court win against Musk) as the long and ugly court battle begins now in Delaware courts, with possible execution by September.” calendar.”
Source: Hollywood Reporter
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
