, the chief executive officer of Tesla TSLA.O and the world’s richest person, said on Friday he was terminating his $44 billion deal to buy Twitter TWTR.N because the social media company had breached multiple provisions of the merger agreement.
Musk also said he was walking away because Twitter fired high-ranking executives and one-third of the talent acquisition team, breaching Twitter’s obligation to “preserve substantially intact the material components of its current business organization.” Twitter, however, is hoping that court proceedings will start in a few weeks and be resolved in a few months, according to a person familiar with the matter.There is plenty of precedent for a deal renegotiation. Several companies repriced agreed acquisitions when the COVID-19 pandemic broke out in 2020 and delivered a global economic shock.
Shares of Twitter were down 6% at $34.58 in extended trading. That is 36% below the $54.20 per share Musk agreed to buy Twitter for in April.Twitter’s shares surged after Musk took a stake in the company in early April, shielding it from a deep stock market sell-off that slammed other social media platforms.
Is anyone surprised? No one is surprised.