Elon Musk’s decision to withdraw from a deal to buy Twitter for $44 billion was supported by Tesla investors with the company’s shares rising.
Tesla shares saw gains in trading last Friday. This is due to the positive investor reaction to Elon Musk’s decision to end the $44 billion Twitter acquisition deal.
TechCrunch reported (11/7), Tesla shares rose 14.51% to USD752.29 per share, which closed on Friday. The share price continued to rise even after regular trading hours by 3.39%.
Musk’s decision to leave the Twitter takeover deal has received huge support from Tesla shareholders. As is known, Musk officially announced that he was withdrawing from the deal through his legal team, for claiming Twitter had provided false information regarding bot accounts.
Previously, Tesla shareholders publicly expressed doubts about Musk’s ability to effectively run Tesla while owning Twitter. Not only that, Musk also runs other businesses that include SpaceX, Neuralink, and The Boring Company. Investor cries grew louder as Tesla’s stock skyrocketed.
In early April, when Musk took a 9.2% stake in Twitter as the social media company’s biggest shareholder, Tesla’s stock was valued at $1,145.45, a drastic drop of more than 34%.
One of the biggest declines in recent months came on April 26, the day after Musk agreed to buy Twitter for $44 billion. Tesla shares slumped more than 12%, bringing its market cap down to $906 billion.
As if nothing was backing up, Twitter shares, which initially rose in early April after Musk disclosed his stake in the company, also fell. Since April 4, Twitter’s stock has fallen 26.34%, pushing its market cap to $28.31 billion.
While Tesla shareholders are now relieved that Musk is barely buying Twitter, the Twitter Board is committed to taking legal action.
Bret Taylor, chairman of the Twitter Board said, “We are committed to closing the deal at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement. We believe we will win on the Delaware Court of Chancery.”