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Twitter Stock Downgraded As Whistleblower Complaint Gives Elon Musk ‘Much Needed Ammunition’ For Legal Battle – Social Media Explorer

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Twitter Stock Downgraded As Whistleblower Complaint Gives Elon Musk 'Much Needed Ammunition' For Legal Battle - Social Media Explorer


Twitter Stock Downgraded As Whistleblower Complaint Gives Elon Musk ‘Much Needed Ammunition’ For Legal Battle

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by Adam

The topline

Rosenblatt Securities analysts downgraded Twitter shares Wednesday. The analyst warned that an explosive whistleblower lawsuit from Elon Musk’s ex-head of cybersecurity might further complicate any legal proceedings.

Here are some key facts

Barton Crockett, a Rosenblatt analyst, said that Twitter shares were downgraded to neutral following a previous buy rating. He also revised his 1-year target from $52 to $37. This implies a 7% downgrade from the current price of $40.

The first reported on by Washington PostCrockett stated to investors that CNN and Peiter Zatko’s whistleblower complaint, which was made by a prominent hacker who was employed at Twitter between 2020 and January 2019, “compels us to take a step back from our previously bullish stance regarding the Elon Musk deal.”

Musk may use the “materially inaccurate representations” of Twitter to file a complaint in an attempt to either drag the case out or to end the deal without having to pay a $1 million termination fee.

Angelo Zino, CFRA analyst, wrote that the complaint was “provides” in a Tuesday note. [Musk]”With much needed ammunition” could be used to help make a case against Twitter and/or provide leverage for a settlement.

Zino said that Twitter had the advantage in September’s trial, but that it was still believing this. He also stated that Twitter’s dismissal of Zatko earlier in the year is “now looking more ominous”. This implies that Twitter shares will be “clearly challenged” by CFRA.

In early trading on Wednesday, Twitter stock fell 0.9% to $39.50. This is in addition to the 7.3% drop after Tuesday’s whistleblower report. Shares are now down 7%, while the tech-heavy Nasdaq has seen a 22% decrease.

The Key Background

Zatko claimed that Twitter deceived investors and users by falsely declaring it has a security system in place despite half its servers being out of date. Zatko stated that Twitter prioritized user growth rather than reducing bots. Executives were awarded bonuses worth up to $10,000,000 tied to the user-count increase, but nothing to reduce fake accounts. He claims he was fired after refusing Twitter CEO Parag Agrawal’s instruction to present “false and misleading” documents to the company’s board, but a Twitter spokesperson attributed the dismissal to performance issues.

Here’s What to Watch

Twitter stock has been on a wild ride since Musk bought a 9% stake in the firm in April, announced a bid to acquire the firm at a massive premium weeks later and then decided he was “terminating” the deal in July over uncertainty about the prevalence of bots on the platform. Twitter’s board sued Musk for backing out of the deal within days, asking a Delaware judge to order the billionaire to move forward with the agreement. The trial is expected to begin in October.

Continue reading

The Twitter Whistleblower: What Does Former Security Chief Peiter Zatko Claim? (SME)

Former security chief claims Twitter buried ‘egregious deficiencies’ (Washington Post)

Ex-Twitter CEO blows the whistle claiming reckless and negligent cyber security policies (CNN)





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