After weeks of dilly-dallying, Tesla, Inc. (NASDAQ:TSLA) chief executive officer Elon Musk confirmed last Friday that he is terminating the deal to buy Twitter, Inc. (NYSE:TWTR).

Legal Battle In Cards: Close on the heels of Musk's disclosure of his intentions, Bret Taylor, chairman of Twitter's board, tweeted that the board is committed to closing the transaction on the price and terms agreed upon with Musk.

He also warned of pursuing legal action to enforce the merger.

"We are confident we will prevail in the Delaware Court of Chancery," Taylor said.

Wedbush analyst Daniel Ives said he sees a "long, nasty court battle" ahead. Given the Twitter board's fiduciary responsibility to keep driving the Musk deal, it will be in the courts battling for potentially years to recoup the deal and/or the break-up fee of $1 billion at a minimum, he added.

"This started as a soap opera in April when Musk launched the bid and ends as a nightmare on a Friday night in July. Now to the courts it goes," Ives said.

Code Red Situation For Twitter: Ives said this is a "code red" situation for Twitter and its board. The analyst does not see other bidders emerging at a time while legal proceedings play out in the courts.

Twitter, according to the analyst, is now besieged by problems on multiple fronts, including employee turnover, advertising headwinds, a questionable DAU metric, brand issues, strategy changes etc., Ives said.

The analyst sees the renegotiation option as clearly out the window now. He reduced the price target for Twitter shares from $43 to $30, reflecting Twitter on a standalone valuation basis.

Related Link: Exclusive: Musk's Material Adverse Effect Not 'An Option For Him Walking Away': Merger Expert Tells Benzinga What's Next

Positive For Tesla: The deal termination is worth 5-10% to Tesla shares, Future Fund founder Gary Black said. The Twitter overhang regarding the need for Musk to sell additional Tesla shares and CEO distraction is now lifted, he added.

The 5-10% move, according to the analyst, may not happen in the coming week. Walking away could be a tactic to get a better price, and Musk might not buy back the $8.5 billion Tesla shares he sold to finance his Twitter buy, the analyst said.

Additionally, institutions that exited Tesla may wait until after the second-quarter earnings to invest back in, he added.

Black also suggested that only when Musk sells the 73.1 million Twitter shares he accumulated, will it be known for sure it's all over and that it isn't just a negotiating tactic.

If Musk can strike a new Twitter deal for $45 per share, the overhang on Tesla shares disappears, given the financing needed drops.

Twitter shares are trading down 8.52% at $33.71 on Monday, according to Benzinga Pro data.

Photo: Created with an image from Steve Jurvetson on Flickr