Twitter is down 38% from Elon Musk's buyout price
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Twitter's stock has been riding the down-escalator since it accepted Elon Musk's acquisition bid — and that has continued after he tried to back out of the deal.
By the numbers: Twitter shares plunged by over 11% to $32.65 on Monday, a 2-year low.
- The stock is now worth about 38% less than the price at which Musk agreed to buy the company — $54.20.
Catch up quick: Musk on Friday sent a letter to Twitter attempting to kill the deal, accusing the company of failing to provide sufficient data about bots on its platform.
- Twitter, which has said it's not hiding anything, has signaled its plans to take legal action to enforce the accord.
Be smart: Deal experts say Musk doesn't have much of a case. But Twitter's stock drop suggests that the company's investors don't expect to get paid the amount they were initially promised.
- It "looks like a long drawn out court battle," Wedbush Securities analyst Dan Ives said in a research note.
- "The problem for Twitter is the Delaware legal battle ahead does not help/solve all the questions for employees, investors, partners, and other stakeholders" and it "comes at a time that digital ad headwinds are increasing," Ives added.
What we're watching: Whether Musk and Twitter strike a merger deal at a lower price. Or an end to the saga that forces Musk to pay a breakup fee — either the $1 billion stipulated in the deal terms, or some higher amount determined by the Delaware Chancery.
