Twitter Plunges, Tesla Rises as Musk Threatens to Terminate Takeover Deal
2022.06.06 16:30
By Geoffrey Smith
Investing.com — Twitter (NYSE:TWTR) stock plunged in premarket trading on Monday after Tesla (NASDAQ:TSLA) CEO Elon Musk threatened to terminate his takeover offer for the company because of its refusal to give him the information he wants over fake accounts on its social media site.
Musk argued in a filing with the Securities and Exchanges Commission that the Twitter board’s failure to give him more detailed information on fake and spam accounts constituted a breach of their agreement, under which Musk and other investors would take the company private at a price of $54.20 a share.
Twitter stock fell 5.5% to $39.95 by 9:07 AM ET (1307 GMT) in response. Tesla stock by contrast was up 3.6%. Tesla stock has tended to have an inverse relationship with Twitter stock since the deal, given that Musk may need to sell or borrow against his holding in the electric vehicle company to raise the money for the deal. As such, anything that reduces the chance of the Twitter takeover going through reduces the likelihood of an overhang in Tesla.
