Twitter Gains on Speculation Court Could Force Musk to Complete Deal
2022.07.13 18:45
Twitter Gains on Speculation Court Could Force Musk to Complete Deal
By Investing.com Staff
Shares of Twitter (NYSE:TWTR) are higher for the second day as the dust settles from Elon Musk’s termination of the $44 billion acquisition of the company. Now, the focus has turned to if Twitter can prevail in Delaware court to force the billionaire’s hand to complete the deal. Many think that based on its complaint it has a good chance.
Short-focused firm Hindenburg Research, which correctly predicted that Musk would walk from the deal, has now accumulated a significant long position in Twitter. “Twitter’s complaint poses a credible threat to Musk’s empire,” Hindenburg said.
Former hedge fund manager and current CNBC host Jim Cramer said the Twitter complaint is “damning” and the Delaware chancery will do its best to force Musk to complete the deal. “It is devastating in detail about how horrendous and infantile Musk was in the process,” he added.
Gordon Johnson of GLJ Research, a known Tesla (NASDAQ:TSLA) bear, said Twitter has Musk “dead to rights” to enforce the deal, and Musk himself remains personally responsible for $33.5 billion of the purchase price. He said this could be detrimental to Tesla (TSLA) shareholders.
Johnson points to section “V” of the complaint from Twitter lawyer Wachtell, Lipton, Rosen & Katz, which notes that under the merger agreement the risk of a market decline was Musk’s alone to bear.
That section reads:
The entire Twitter complaint against Musk can be read on Wachtell, Lipton, Rosen & Katz website here.
