Twitter stock sank Monday after Elon Musk late Friday terminated his $44 billion bid to acquire the company. The Tesla chief executive announced the move in a letter.
It is not clear whether Twitter's board will accept a $1 billion breakup fee from Musk or if there will be a court battle over the deal. The agreement said either side could pursue a $1 billion penalty from the other, depending on circumstances.
In the letter, disclosed in a Securities and Exchange Commission filing, the attorney for Musk charged that "Twitter has not complied with its contractual obligations."
News that the deal was in jeopardy surfaced Thursday in a report by the Washington Post. It said Musk's camp concluded that Twitter's figures on spam accounts are not verifiable.
Twitter stock dropped 7% to 34.24 in morning action on the stock market today.
Twitter stock has been on a roller-coaster ride ever since Musk, in April, made a highly speculative bid to acquire the social media company for $54.20 a share.
Most Trusted Financial Companies — Take A Survey And Win A $50 Amazon Gift Card
The Twitter board of directors ultimately agreed to the deal. But action in Twitter stock showed there was plenty of uncertainty as to whether it would go through or not.
Twitter Stock: Musk Team Stops Talks
Musk's team initially halted discussions on the deal in April, claiming that Twitter had lowballed the number of spam accounts. Twitter said about 5% of users were spam accounts. Musk said it was about 20%.
The Wall Street Journal on Thursday said Twitter laid off 30% of its talent acquisition team, as the company deals with increasing business pressures. The layoffs are expected to affect fewer than 100 people. The cuts are limited to the talent acquisition team, the report said.
The Journal said a Twitter spokesman confirmed the layoffs but declined further comment.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
