Shares of Twitter slid more than 11 per cent in the first day of trading after billionaire Elon Musk said that he was abandoning his $US44 billion ($65 billion) bid for the company and the social media platform vowed to challenge Musk in court to uphold the agreement.

Twitter is now preparing to sue Musk in Delaware where the company is incorporated. While the outcome is uncertain, both sides are preparing for a long court battle.

Musk alleged on Friday that Twitter has failed to provide enough information about the number of fake accounts on its service. Twitter responded in a weekend letter disclosed on Monday that his “purported termination is invalid and wrongful” and that the company has continued to provide the information he “reasonably requested.”

Twitter’s lawyers called the termination of the deal “invalid and wrongful” in a letter to the Musk’s attorneys, a preliminary step by the social network in the looming legal battle.

William Savitt of Wachtell, Lipton, Rosen & Katz wrote to Musk’s lawyers at Skadden Arps Slate Meagher & Flom, saying that backing out of the deal “constitutes a repudiation of their obligations under the agreement,” according to a copy of the July 10 letter filed with the Securities and Exchange Commission.

“Twitter has breached none of its obligations under the agreement, and Twitter has not suffered and is not likely to suffer a company material adverse effect,” Savitt wrote. “Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk parties’ obligations under the agreement.”

‘With Musk officially walking away from the deal, we think business prospects and stock valuation are in a precarious situation.’

CFRA analyst Angelo Zino

Twitter said last month that it was making available to Musk a “fire hose” of raw data on hundreds of millions of daily tweets.

The company has said for years in regulatory filings that it believes about 5 per cent of the accounts on the platform are fake. But on Monday, Musk continued to taunt the company, using Twitter, over what he has described as a lack of data. In addition, Musk is also alleging that Twitter broke the acquisition agreement when it fired two top managers and laid off a third of its talent-acquisition team.