In what appears to be a dismissive response, Elon Musk fired back at Twitter on Friday after the social media giant partially blamed its second-quarter revenue lapse on uncertainty surrounding the pending $44 billion acquisition of Tesla’s chief executive.
Musk tweeted, “I am rubber, they are glue.”
The social media giant reported total revenue of $1.18 billion for the second quarter, which includes advertising revenue and subscriptions of $1.08 billion and other revenue of $101 million. Economists surveyed by Refinitiv were expecting total revenue of $1.32 billion.
Twitter said it faced $33 million in costs during the quarter related to the acquisition. In addition to Musk’s deal, the company cited “advertising industry headwinds linked to the macroenvironment”.
Earlier this month, Musk announced that he would Terminate the deal, claiming Twitter Musk’s takeover offer on April 25 was “in material breach of several provisions” and “appears to have made false and misleading representations”. Musk disputes Twitter’s internal estimates that spam and fake accounts make up less than 5% of its users.
In response to the allegations from Musk and his team, Twitter called the “alleged termination” of the deal “invalid and incorrect” and “a breach of their obligations under the agreement.” Twitter is also suing Musk, accusing him of “refusing to honor his obligations to Twitter and its shareholders because the deal he signed no longer serves his personal interests.”
A trial in the legal battle is scheduled for October.
Twitter declined to provide financial guidance and said it would not host the earnings call. It added that shareholders’ approval is the only remaining approval or regulatory condition on the way to completing the merger.
As of the time of publication, Twitter’s shares are trading at about $39 per share, significantly lower than Musk’s original offering of $54.20 per share. The stock is down more than 7% to date.
It is not clear who will emerge victorious in this case, but if Mr. Musk loses, it is unlikely that he will be able to walk away from the deal without paying any penalty.
Should Mr. Musk refuse to buy Twitter despite being ordered by a judge, he could be “finished in contempt and daily fined until he complies”, said Boston College law professor Brian Quinn. , who teaches about the law relating to mergers and acquisitions. , Told Bloomberg, “For Musk, that must be a huge number.”
Tesla, which is owned by Musk, also a Delaware corporation, would give the court the power to go after Musk’s stock options. However, such a scenario is unprecedented.
