Twitter Inc. and Elon Musk are set for a blockbuster courtroom battle over Musk’s attempt to terminate his $44 billion acquisition deal for the social media company, according to Wedbush analyst Dan Ives.
“This will be a ‘Game of Thrones’ battle in court with the fake account/bot issue front and center, but ultimately Twitter’s Board is holding Musk’s feet to the fire to finish the deal at the agreed upon price,” wrote Ives, in a note released on Tuesday evening. “Overall this has been a black eye for Musk and a horror movie for Twitter (and its employees) with no winners since the soap opera began in April.”
On Tuesday Twitter Inc.
sued Musk over his attempt to end the acquisition, marking the latest twist in the saga between the social media company and the Tesla Inc.
and SpaceX chief executive. In its lawsuit, filed in the Delaware Chancery Court, Twitter described Musk’s exit strategy as “a model of hypocrisy.” On Friday, in a letter terminating the deal that was sent to Twitter’s chief legal officer, Musk and his lawyers claimed Twitter would not share requested information with him and contended there were more bots on the service than Twitter claims in its securities filings.
Now the two parties are gearing up for an epic legal battle. “The Street and 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 and nightmare playing out since April,” Ives wrote in the note. “There are a range of possibilities that can come from the Delaware court including settlement, breakup fee paid, deal enforced, and a myriad of other outcomes.” Wedbush maintained its neutral rating and $30 price target on Twitter.
Shares of Twitter, which ended Tuesday’s session up 4.32%, compared to the S&P 500’s
decline of 0.92%. Twitter gained 2.1% to $34.76 in premarket trading on Wednesday.