Tesla shares rose sharply after the close of trading on Friday as investors reacted positively to Elon Musk’s move to cancel $44 billion deal to buy Twitter.
Tesla shares rose 14.51% to close at $752.29 on Friday. The share price continued to rise after normal trading hours by as much as 3.39% before settling up about 2.68% as of 7:48 pm ET.
Legal Team Musk issued a letter Friday is officially trying to get out of the Twitter acquisition agreement. The letter came after Musk publicly attacked Twitter – no less through Twitter – over the calculations of the social network’s bots, sparking speculation that he would try to get out of the deal.
The letter said Musk was terminating the deal because Twitter was materially violating numerous provisions of its merger agreement, and also claimed that the company “appears to have made false and misleading statements” that he relied on.
Tesla shareholders have publicly raised concerns about Musk’s ability to effectively manage Tesla by owning Twitter — along with several of his other companies, including SpaceX, Neuralink and The Boring Company. Their screams grew louder as Tesla shares continued to fall.
In early April, when Musk acquired a 9.2% stake in Twitter, becoming the social network’s largest shareholder, Tesla stock was worth $1,145.45. The share price has since fallen by more than 34%.
One of the biggest drops in the past few months came on April 26, the day after Musk agreed to buy Twitter for $44 billion. Tesla shares fell over 12%, dropping its market capitalization to $906 billion.
Twitter shares, which initially surged in early April after Musk disclosed his stake in the company, also fell. Since April 4, Twitter shares have fallen 26.34% and now have a market capitalization of $28.31 billion. Today’s stock price of $36.81 is well below Musk’s cash offer for Twitter, which valued the business at $54.20 per share.
While Tesla shareholders may have experienced short-term relief, the saga between Twitter and Musk is not yet over.
The Twitter board has already vowed to fight Musk. Bret Taylor, chairman of Twitter, tweeted Friday: “We are committed to closing the deal at the price and terms agreed with Mr. Musk and plan to take legal action to enforce the merger agreement.” “We are confident that we will win.” in the Delaware Chancery Court.”
Credit: techcrunch.com /