Twitter Inc. TWTR has a “strong iron fist upper hand” in the legal fight set to play out in a Delaware court after Tesla Inc. TSLA CEO Elon Musk said he was terminating a deal to purchase the social media platform, according to Wedbush analyst Dan Ives.
The Twitter Analyst: Ives maintained a “Neutral” rating on Twitter with a 12-month price target of $30.
The Twitter Thesis: Ive noted that Twitter sued Musk in the Delaware Court of Chancery after the purported termination of the purchase deal by the latter.
The Wedbush analyst said Musk started going against the deal once the market “started turning” after the April bid was announced.
“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,” Ives wrote in a note seen by Benzinga.
Ives liked the upcoming legal battle to “Game Of Thrones” and said the fake account and bot issues were front and center.
“Ultimately Twitter’s Board is holding Musk’s feet to the fire to finish the deal at the agreed upon price.”
The attempted purchase of Twitter has been a “black eye” for Musk, according to Ives, who said it has been a “horror movie” for Twitter and its employees.
Ives said a number of possibilities are on the cards as an outcome of the litigation, including settlement, payment of breakup fee and enforcement of deal.
The analyst said there were “no winners” in the soap opera that began in April and Twitter’s stock would continue to trade on a standalone basis amid the legal tussle.
Twitter Price Action: On Tuesday, Twitter shares rose 4.35% higher at $34.07 in the regular hours and gained 1.1% to $34.46 in the after-hours session, according to Benzinga Prodata.