Elon Musk on Friday pulled the plug on his $44 billion deal to buy Twitter, accusing the social media giant of making “misleading” claims about the number of fake accounts, a regulatory filing showed.
Musk’s attempt to scuttle the deal he signed in April sets the stage for an epic legal battle over the billion-dollar breakup fee and more.
Musk’s change of heart appears to indicate some “buyer’s remorse” after offering a price of $54.20 a share that now looks “ridiculous,” CFRA Research senior analyst Angelo Zino said in a note to investors on of how the deal was officially cancelled.
Immediately after the news broke, Twitter chairman Brett Taylor vowed to sue Musk to enforce the terms of the buyout agreement, saying “we’re confident we’ll win.”
Musk – the world’s richest man – used some of his fortune in Tesla shares to pay back loans to buy Twitter, but the noise and market factors have pushed the electric car maker’s share price lower.
“This soap opera has had a lot of ups and downs … it’s always been a headache to chase Twitter at a $44 billion valuation for Musk and never made much sense on (Wall) Street, now it’s ending up in the Twilight Zone. “
Concerns about Tesla have included concerns that its chief executive is distracted by the Twitter saga, and that the technology platform would certainly demand his attention if he owned it.
“His erratic behavior obviously affected Tesla’s stock price, which undermined the financing that was all planned.”
His comments came during a key annual event at which Twitter and other social media companies typically award massive advertising contracts worth hundreds of millions of dollars.
“Musk was very close to grabbing the copper ring, but he couldn’t control himself long enough,” Caruson said. “He opened his mouth and kicked the first domino that broke the deal.”