Twitter Inc (NYSE:TWTR) investors saw the stock rally on Wednesday as the market anticipate Elon Musk may be left holding the bag despite his attempt to ditch his takeover of the social media company.
It comes after Twitter attempted to regain the initiative in its takeover battle with Tesla chief executive and billionaire, landing him with a very long and detailed lawsuit.
Musk abandoned his US$44bn bid at the weekend, citing unhappiness with a lack of disclosure over the number of bots or fake accounts using the social media giant’s site.
In response, Twitter last night issued a 62-page writ in a Delaware court to hold Musk to the original terms of his $54.20 a share bid.
In New York, Twitter stock was up US$2.01 or 5.9% changing hands at US$36.07.
Daniel Ives, analyst at Wedbush, in a note, said that in ‘Wall Street’s eyes Twitter has a clear upper hand.
“While we assign fair value for Twitter as US$30, the stock is now factoring in some significant chance that Musk will ultimately have to pay Twitter a settlement well north of US$1bn and in a possible scenario ultimately still have to buy the company at the agreed upon price at US$54.20,” Ives said.
He added: “The Street and legal experts across the board view Twitter as having a strong iron fist upper hand heading into the Delaware court battle after months of this fiasco and nightmare playing out since April.
“This will be a fierce battle in court with the fake account/bot issue front and center, but ultimately Twitter's Board is holding Musk's feet to the fire to finish the deal at the agreed upon price.
“Overall this has been a black eye for Musk and horror movie for Twitter (and its employees) with no winners since the soap opera began in April.”