The never-ending drama involving Twitter ( NYSE: TWTR ) ratcheted up Friday following a report that it has laid off one-third of its recruiting team amid more uncertainty over whether Elon Musk will go through acquiring the social-media giant.
Twitter ( TWTR ) shares fell by almost 4% in pre-market trading in the wake of a Wall Street Journal report on the layoffs. While the total number of jobs cut is estimated to be less than 100, and only involve Twitter's ( TWTR ) talent-acquisition group, the move will likely add to the concerns about the state of the company as Musk is reportedly weighing options that could include dropping the price of his original deal to acquire Twitter ( TWTR ) for $44B.
On Thursday, a Washington Post report said that according to people close to the matter, Musk's deal is in "serious jeopardy" because the Tesla ( TSLA ) chief executive remains skeptical about Twitter's ( TWTR ) claiming that less than 5% of its accounts are either spam or from bots. Musk has reportedly reached a point where he is considering steps such as lowering his offer for Twitter ( TWTR ), or even walking away from the deal.
Musk's current offer values Twitter ( TWTR ) at $54.20 a share. However, Twitter ( TWTR ) shares have fallen by more than 31% since Musk made his bid in April. Musk and Twitter ( TWTR ) are each on the hook to pay a $1 billion breakup fee if either side calls off the deal under certain circumstances.
Wedbush Securities analyst Dan Ives said that all the latest goings on suggest that Musk's original offer price is "out the window," and he now estimates there is about a 60% chance that the deal will be renegotiated at between $42 and $45 a share. Ives cut his price target on Twitter's ( TWTR ) stock to $43 a share.
For further details see:
Twitter shares fall as layoffs hit company's recruitment team