Tesla shares received an upward jolt in after-hours trading Friday as investors reacted positively to Elon Musk’s decision to end his $44 billion deal to buy Twitter.
Tesla shares were up 14.51%, closing at $752.29 Friday. The share price continued to climb a whopping 3.39% after regular trading hours, before settling at a rise of about 2.68% as of 7:48 PM ET.
Musk’s legal team issued a letter Friday formally attempted to pull out of a deal to take over Twitter. The letter came after Musk publicly attacked Twitter — via Twitter no less — over the social media company’s bot calculations, sparking speculation he might try to end the deal.
The letter said Musk was terminating the deal because Twitter materially violated multiple provisions of its merger agreement, and also argued that the company “appears to have made false and misleading statements” on which it relied.
Tesla shareholders have publicly expressed concerns about Musk’s ability to effectively run Tesla while owning Twitter — along with his handful of other companies, including SpaceX, Neuralink and The Boring Company. Their screams grew louder as Tesla stocks continued their downward trajectory.
In early April, when Musk took a 9.2% stake in Twitter, becoming the largest shareholder in the social media company, Tesla shares were priced at $1,145.45. The share price has since fallen by more than 34%.
One of the bigger drops in recent months came on April 26, a day after Musk agreed to buy Twitter for $44 billion. Tesla shares fell more than 12%, pushing its market cap to $906 billion.
Twitter shares, which initially rose in early April after Musk disclosed his stake in the company, have also fallen. Since April 4, Twitter shares have fallen 26.34%, bringing its market cap to $28.31 billion. Today’s stock price of $36.81 is well below Musk’s cash offer on Twitter, which valued the company at $54.20 a share.
While Tesla shareholders may have been equally relieved, the Twitter-Musk saga is barely over.
The Twitter board has already pledged to fight Musk. Bret Taylor, chairman of the Twitter board, tweeted Friday: “We are committed to closing the transaction at the price and terms agreed with Mr. Musk and intend to take legal action to enforce the merger agreement. We are confident that we will prevail in the Delaware Court of Chancery.”