Twitter shares took off on Wednesday after the hedge fund Hindenburg Research revealed that it had acquired a stake in the capital of the social network, considering that it could prevail in court against Elon Musk.
Nathan Anderson, founder of the Hindenburg Research fund confirmed to the agency AFP that his firm had taken a stake “significant, but less than 5% on Twitter”limit from which an investor must report to the securities regulatory authority in the United States (SEC).
Around 5:20 p.m. GMT, shortly before the close of the day in new yorkthe share of Twitter 8.10%, to 36.82 dollars.
Anderson indicated that This is a first for Hindenburg, which has never previously made a buyer position publicsince his investor profile is above all bets against titles in the market.
For the financial Twitter has a “solid record” in its legal proceedings that began Tuesday before a Delaware court. (eastern United States), aimed at tycoon Elon Musk respecting his commitment to purchase the social network.
The directors of Twitter they reproach Musk for giving up the acquisition for deceitful reasons.
Elon Musk, for his part, stressed that Twitter had minimized the number of bots and spam (unwanted messages) on the social network and that he had not provided him with enough information about the false accounts, which Twitter denies.
“On the subject of bots”, those automated accounts that are not taken into account as individual users“is perhaps the worst pretext that Musk could have chosen to end the transactionknowing that was clearly the reason he had initially engaged,” according to Anderson.
Only days after having made the purchase offer, in the middle of AprilMusk had also assured that if the transaction was finalized he would “defeat the spams” or fight them “to the end”.
For Nathan Anderson, Twitter has “more leverage” than its adversary in this process “knowing the potential threat to Musk’s empire in the event of a clear victory” for the social network.
“The market sees this action in court as ‘very strong,’” Dan Ives, an analyst at Wedbush Securities, said in a note.
“The action now includes a significant possibility that Musk may ultimately have to agree to pay much more than $1 billion.” sum corresponding to the severance pay provided for in the initial agreement between the businessman and Twitter “and even the possibility that he (Musk) must buy the company at the expected price,” the analyst explained.
Twitter sued Elon Musk on Tuesday for violating the $44 billion deal to buy the social media platform, and asked a Delaware state court to order the world’s richest person to complete the merger at the agreed $54.20 per Twitter shareaccording to a court filing.
“Having put on a public show to put Twitter on the line, and having proposed and then signed a vendor-friendly merger agreement, Musk apparently believes that he – unlike any other party subject to Delaware contract law – is free to change his mind, wreck the company, discontinue operations, destroy shareholder value, and walk away.”states the lawsuit.
Twitter’s Chairman of the Board of Directors, Bret Taylor, tweeted Tuesday that a lawsuit has been filed in the Delaware Court of Chancery “to that Elon Musk meets his contractual obligations.”
The suit urges the court to order the billionaire to complete his Twitter purchase agreement, arguing that no amount of financial compensation could repair the damage he has caused. “Musk’s conduct merely confirms that he wants to escape the binding contract he freely signed, and harm Twitter in the process,” the lawsuit warns. “Twitter has suffered and will continue to suffer irreparable harm as a result of Defendants’ breaches.”
The Delaware trial court frequently handles business disputes between the many corporations, including Twitter, that are incorporated there.
(With information from AFP and Reuters)