Twitter share slumped on Monday following Elon Musk’s decision to terminate his $44billion offer to acquire the social media company.
The billionaire cited breach of agreement as reason for pulling out.
Specifically, Twitter’s share was down -5.10%, selling at $36.81 on the exchange floor, in contrast to the $38.79 it closed Friday’s session with.
The sell off came on the heels of Musk cancelling the $44 billion acquisition deal after a long disagreement over the percentage of bot accounts in the monetised daily active users (mDAU).
Monday’s dip reflects how investors negatively reacted to report of the deal falling through. They engaged in a sell off out of fear that the share would fall as a ripple effect from the termination.
The bears knocked the market capitalisation of Twitter down, with the company now valued at $28.13 billion, -36% below Musk’s offering price. It was valued around $30 billion prior to Musk’s 100% offer in third week of April.
Ripples Nigeria had reported that Mike Ringler, Musk’s lawyer, said, “Twitter has not complied with its contractual obligations”, adding that, “Twitter has failed or refused to provide this information,” hence his reason to terminate the deal.
However, Twitter’s board has vowed to take Musk to court, to compel him to live up to the acquisition agreements, one of which is the break fee, which stipulates that any party who walks away from the deal would pay a sum of $1 billion.