Tesla shares get baby bump as Elon Musk tries to pull out of Twitter deal – TechCrunch
Tesla stock received an after-hours rally on Friday as investors reacted positively to Elon Musk’s move terminates $44 billion deal to buy Twitter.
Tesla shares rose 14.51% to close at $752.29 on Friday. The stock price continued to move higher after normal trading hours by 3.39%, before surging about 2.68% at 7:48 p.m. ET.
Musk’s legal team issued a letter Friday officially tried to pull out of the Twitter acquisition deal. The letter comes after Musk publicly attacked Twitter – via Twitter nothing more – about the social media company’s bot calculations, prompting speculation that he would try to get out of the deal.
The letter said Musk had terminated the agreement because Twitter had materially violated several provisions of the merger agreement, and also that the company “appears to have made false and misleading statements” on which he was based. enter.
Tesla shareholders have publicly expressed concern about Musk’s ability to effectively run Tesla while owning Twitter — along with several of his other companies including SpaceX, Neuralink and The Boring Company. Their cries grew louder as Tesla’s stock continued its downward trajectory.
At the beginning of April, when Musk held a 9.2% stake in Twitter, becoming the social media company’s largest shareholder, Tesla shares were priced at $1,145.45. The share price has since fallen more than 34%.
One of the bigger drops over the past several months was on April 26, the day after Musk agreed to buy Twitter for $44 billion. Tesla shares jumped more than 12%, dragging its market capitalization down to $906 billion.
Twitter shares, which initially rose in early April after Musk revealed his stake in the company, also fell. Since April 4, Twitter stock has dropped 26.34%, pushing its market capitalization to $28.31 billion. Today’s stock price of $36.81 is far below Musk’s cash offer to Twitter that values the business at $54.20 per share.
While Tesla shareholders may have enjoyed a moment of relief, the Twitter-Musk saga is far from over.
Twitter’s board has promised to fight Musk. Bret Taylor, chairman of the board of Twitter, tweeted Friday, “We are committed to closing the transaction at the price and terms agreed with Mr. Musk and plan to pursue legal action to enforce the merger agreement. We are confident that we will prevail before the Delaware Premier Court. “