The determination of Elon Musk getting off Twitter shoppinghas generated in addition to reactions and the possible entry into a legal battle, the specific measure of a drop of up to 6% in the shares of the social media company.
Twitter is now preparing to sue Musk in Delaware, where the company is incorporated. While the outcome is uncertain, both sides are preparing for a lengthy court battle.
Musk agreed to a $1 billion breakup fee as part of the purchase deal, though it appears Twitter CEO Parag Agrawal and the company are preparing for a legal fight to force the sale.
“For Twitter, this fiasco is a nightmare scenario and will result in an Everest-like uphill climb for Parag & Co. to navigate the myriad challenges ahead around employee turnover/morale, headwinds from hype, investor credibility around fake account/bot issues, and a host of other issues abound,” wrote Wedbush analyst Dan Ives, who follows the company on AP.
“With Musk officially walking away from the deal, we believe the business outlook and stock valuation are in a precarious state,” CFRA analyst Angelo Zino wrote. “(Twitter) will now have to go into it as a standalone company and deal with an uncertain ad market, damaged employee base, and concerns about fake account status/strategic direction.”