Twitter (NYSE:TWTR) shares fell to their lowest level since March in early trading on Monday after Elon Musk backed out of a $44B deal to buy the social network and take it private.
The decision sets the stage for a potential legal battle between Twitter and the billionaire Tesla (NASDAQ:TSLA) founder. In a filing with Securities and Exchange Commission last Friday, Musk accused Twitter of not properly disclosing information about the number of bots or spam accounts on the platform.
Twitter pushed back against the claim, adding that it was committed to following the transaction agreement signed with Musk. Chair Bret Taylor vowed to pursue legal action in a court in the U.S. state of Delaware to force Musk to honor the deal.
Twitter is planning to file the lawsuit against Musk as soon as this week, Reuters reported, citing people familiar with the matter.
On Monday, Musk responded to the threat with a tweet that appeared to mock the social media company, saying the suit would inadvertently force Twitter to reveal more data on fake accounts.
Under the agreed terms of the deal, Musk would need to pay a $1B fee if the deal is not completed due to lack of financing or regulatory concerns. But that fee would not apply if Musk himself instead chooses to end the purchase.
As of 09:34 EST (1334 GMT), Twitter shares were trading down 5.47% to $34.72 a share.
News Source: Fusion Media Limited
