June 3, 2022
Analysts are exploring the possibility that Elon Musk might not buy Twitter, especially now that the company’s stock is trading at $39.30 a share.
In April, Tesla CEO Elon Musk agreed to buy Twitter for $54.20 per share. But while Twitter shares, which have been between $35 and $41 since May, eventually rose to $51.57 after Musk’s announcement, the stock is now trading for less than three-quarters of the agreed amount.
“I think Musk agreed to buy Twitter in a dramatically different market environment than we’re in today. Tesla has lost $400 billion in market capitalization. And the value of Twitter is significantly lower today, in the market’s eyes, than when the deal was first announced,” said Daniel Ives, managing director and senior equity research analyst at Wedbush Securities.
Ives backed Wall Street’s position that ‘54.20 is out the window.’ He explained that it is either a renegotiated, lower price for Twitter in the $42 to $45 range, or Musk tries to pay the billion-dollar breakup fee and walk away.
Although the bot controversy delayed the deal, legal experts pointed out that Musk can do little, as Twitter pointed out that their assessment of the bot on the platform could be wrong.
The sources for this piece include an article in Slate.
