Twitter stock soars after Wall Street judges social network has ‘clear upper hand’ in lawsuit against Tesla boss Elon Musk who has axed a £37bn takeover
Twitter stock soared after Wall Street judged the social network had a ‘clear upper hand’ in its lawsuit against Tesla boss Elon Musk who has axed a £37billion takeover.
The stock jumped 7.9 per cent to $36.75 as traders predicted Musk, the world’s richest man, will have to pay Twitter a substantial settlement for breaking the takeover agreement, or even be forced to buy the platform for the agreed price of $54.20 per share.
Upper hand: Traders predicted Elon Musk, the world’s richest man, will have to pay Twitter a substantial settlement for breaking the takeover agreement
US broker Wedbush said many investors concluded the ‘Game of Thrones battle in court will result in some version of a Twitter win’.
‘Legal experts across the board view Twitter as having a strong iron fist upper hand heading into the Delaware court battle after months of this fiasco,’ it said.
Also confident was short seller Hindenburg Research, which acquired a ‘significant long position’ in the firm, adding the lawsuit posed a ‘credible threat’ to Musk’s business empire.
Hindenburg clashed with Musk on Twitter after warning there was a ‘significant risk’ the price of the takeover would be reduced and the share price could fall by 50 per cent if the deal was scrapped.
Twitter has pointed out that the value of Musk’s 15.7 per cent stake in Tesla, through which he derives most of his wealth, has dropped sharply from its peak in November and he now ‘wants out’.
‘Musk apparently believes that he, unlike every other party subject to Delaware contract law, is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,’ its lawsuit said.