The Tesla billionaire backed out of the deal after claiming Twitter had not provided enough information about the number of fake accounts on the site.
Twitter have announced they are planning to take legal action to force the deal through.
Their share price stood at $32.64 (£27.44) at close of trade on Monday, far below the $54.20 (£45.56) share price agreed between Mr Musk and Twitter in April, when he first revealed his plans to buy it.
Founder and CEO of ConsultMyApp Mike Rhodes said of the dispute: “From day one, it was easy to question Musk’s motivations for buying Twitter.
“The potential issues were particularly clear in April regarding how to identify Bot/fake account numbers, as this threatened to seriously undermine Twitter’s valuation.
“Musk’s suspicions, it seems, were validated, as Twitter has been reluctant to release the calculation behind its own estimates, and Musk has jumped on this as his excuse to exit the deal.
“Musk and his lawyers have always been clear on the need for data to judge the number of fake accounts.
“Yet Twitter has failed or refused to provide this information, instead opting for incomplete or unusable information.
“Last month, for instance, Twitter provided Musk with its ‘firehouse’ data in an attempt to counteract claims that the entrepreneur was being denied the information he was legally entitled to as part of the deal.
“Twitter’s firehouse provides a real-time stream of the millions of public tweets posted daily on the platform, as well as information on the accounts behind them.
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“In sharing this data, Twitter made an unprecedented move, creating a number of privacy concerns and competitive risks, given Musk’s recent tweets on violating NDAs.
“Yet the data has not put to bed the issue of automated accounts, and it is unlikely that Musk was ever going to be able to deduce anything from the data that the platform itself could not.
“In the end, it seems to have been another case of Twitter offering up information to Mr Musk in a rather convoluted form, rather than providing real proof of Twitter’s business and financial performance.
“The failure to cooperate with Musk seems to be rather ironic and misguided, given that one of the chief reasons the entrepreneur gave for taking over Twitter was his belief that he could add business value by removing spam bots.”
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Mr Rhodes also revealed that the social media company, founded by Jack Dorsey, Noah Glass, Biz Stone and Evan Williams in 2006, will be left worse off as a result of their conflict with Mr Musk.
He continued: “As for the biggest loser, it is clearly Twitter. Musk is set to lose $1bn, pennies in the grand scheme of things, but Twitter has lost valuable employees, suffered managerial disruption, and has had suspicions raised around the true DAU/MAU (Daily Active Users/Monthly Active Users ratio) figures of ‘real’ people.
“Given the DAU/MAU numbers are directly correlated to advertising revenues and are seen as a general health indicator for any app, if these were subsequently found to be misrepresented by the business, the investor backlash could cause massive shockwaves.
“Musk has got what he wanted – a bit of attention and to aggravate the Silicon Valley elite – but Twitter has had some very painful truths exposed which could have a very significant long-term impact on the business.”