In response to Elon Musk’s late-Friday threat to renege on his $44 billion purchase of the troubled social media network, Twitter stock is down almost 7% on its first trading day.
Twitter to sue Elon Musk over drop in Stocks
As it gets ready to take the dispute to the Delaware Chancery Court, Twitter, which previously threatened legal action to keep Musk to his word, has now recruited the renowned American law firm Wachtell, Lipton, Rosen & Katz LLP.
There may be a lawsuit filed soon, according to reports.
The reason Musk is canceling the $54.20-per-share merger, according to his lawyers, is because “to the extent that Twitter has underrepresented the number of fraudulent or spam accounts on its network, that may constitute a Company Material Adverse Effect” under the terms of the deal.
According to them, Mr. Musk is assessing whether the organization’s “declining economic prospects and financial outlook” will also have a major detrimental effect, providing him with a unique and different reason to terminate the Merger Agreement.
