Forensic financial research firm Hindenburg Research believes that Mr Musk presently occupies such a disproportionately strong position at the Twitter negotiating table, so much so that if he were to walk away today, the consequences would entirely fall on Twitter and that’s despite the US$1 billion breakup fee Mr Musk would need to pay.

“We believe that if Elon Musk’s bid for Twitter disappeared tomorrow, Twitter’s equity would fall by 50 per cent from current levels,” Hindenburg Research said in a statement.

According to the research firm, the stage for this power imbalance was set after Mr Musk initially purchased a 9.2 per cent stake in Twitter, followed by his offer to buy the company in its entirety, which provoked its panicked board to examine other options, including other offers.

But this turned out to be a dead-end for Twitter because “better competing funds failed to materialise”, which forced it to accept Mr Musk’s $44 billion bid.

“Since the day before Musk disclosed his initial stake in Twitter, multiple developments have weakened the company’s position, threatening the current deal dynamic,” Hindenburg Research said.

Among these developments is a broad meltdown in tech stocks and Twitter’s weak quarterly financials.

Hindenburg Research explained that Twitter’s recently reported performance represents further downside that hasn’t been priced into the stock. The social media company also admitted to overstating its daily active user count just four months after its $809 million securities fraud settlement over a similar issue.

“We suspect that Twitter continues to overstate its true daily active users, despite the revision. As indicated by Musk, the platform is flooded with bots, spam, and scam accounts that likely inflate its genuine user metrics even further,” the researcher said.

But Twitter’s turmoil does not end there. Hindenburg Research believes that Twitter’s precarious position has bolstered Mr Musk’s leverage in potentially making a new and reduced offer that Twitter may have no choice but to accept.

“Consequently, we see a significant risk that the deal gets repriced lower,” Hindenburg Research said.

This speculative remark didn’t go unnoticed by Tesla’s founder, who responded cryptically to Hindenburg Research in a post on Twitter reading “Interesting. Don’t forget to look on the bright side of life sometimes!”

Moreover, Hindenburg Research pointed to the “undue pressure” placed on Tesla with Musk already opting to sell US$8.4 billion in Tesla shares to help raise capital for his Twitter bid, which contributed to Tesla falling 12 per cent during the day’s trading session.

“A lower deal price with less excessive leverage will place both Twitter and Tesla on more solid financial footing,” the researcher said.

And with Musk having already made it clear to Twitter’s board that should the deal not consummate he will sell his shares, the researcher believes the social media giant’s stock is due to be re-rated significantly lower.