Twitter shares sank sharply in early premarket trade Monday after Elon Musk said he is trying to terminate his $44 billion takeover of the company.
Shares of the company fell nearly 9% in U.S. premarkets before paring some losses to trade around 7% lower. Tesla stock, meanwhile, was up around 1% in premarket trade.
On Friday, Musk’s attorney notified Twitter’s board that he wants to cancel the deal. The billionaire has taken issue with bots and fake accounts on Twitter and says the company isn’t being truthful about how much activity on the service is authentic.
Twitter, on the other hand, says it has given Musk the information he needs to assess its claim that spam accounts make up only 5% of monetizable daily active users, including a so-called “firehose” of daily tweets.
Richard Windsor, founder of research company Radio Free Mobile, said he’s not a Twitter shareholder but if he was, he’d sell now.
“There is still a disconnect between the fundamentals and the share price,” Windsor told CNBC’s “Squawk Box Europe” Monday.
“If you look at some of where the technology sector has gone over the last couple of months, you could put Twitter’s valuation somewhere between $13 [billion] to $15 billion which is around about roughly 50% below even where the share price is today.”
This is a developing story and will be updated shortly.
