Twitter stock drops, signaling investor concern about Elon Musk deal
Twitter’s share price fell below the purchase amount Wednesday
"Yep. The d-w-ac board has musk already owning twit and letting frump back on. Even though the twit board agreed on the initial price, it goes into negotiations now with all parties. The price can change I believe."
Sure. Somebody could offer a higher price.
By Faiz Siddiqui and Rachel Lerman Today at 12:29 p.m. EDT
Elon Musk agreed to buy Twitter for $54.20 per share. (Patrick T. Fallon/Bloomberg News)
SAN FRANCISCO — Twitter investors appeared spooked Wednesday by the possibility that the takeover deal with Elon Musk could fall through, sending the stock price dropping well below his offer.
Musk agreed to pay $54.20 per share for Twitter, or about $44 billion, but the stock price fell to $48.26 during trading Wednesday, signaling that some investors doubt the deal will be successful, analysts said.
The CEO of electric car company Tesla has outlined his plan to buy Twitter by taking out loans from banks and financing nearly half of it with his own equity, probably from Tesla shares.
While the Twitter acquisition deal in all likelihood is still going to be completed later in 2022, two areas of doubt emerged Tuesday.
Tesla’s stock sank by 12 percent Tuesday, driving the car company‘s value down by more than $100 billion and raising questions about Musk’s ability to pay because of the roughly $30 billion hit to his net worth.
And more terms of the deal were disclosed, including a $1 billion breakup fee, which analysts say is not high enough to prevent either party from walking away.
“The Street’s starting to bet and factor in the possibility that the deal doesn’t happen and Musk walks away,” said Dan Ives, an analyst for Wedbush Securities.
Twitter’s stock was down about 3 percent by early Wednesday afternoon. Tesla, by contrast, was up Wednesday after it took a beating a day earlier. Ives said the inverse relationship between the two stocks would not prove fruitful for Musk.
Market expert Scott Sheridan, CEO of online brokerage Tastyworks, cautioned not to read too much into what one day’s stock movement could mean for the deal.
“It’s tough to say if Tesla was down so much yesterday in sympathy with the market or if the market was down in sympathy with Tesla,” he said in an email. “Either way, if this continues, it’ll throw a potential wrench in Elon’s plan to buy Twitter since he needs to sell Tesla stock to cover some of the financing.”
Musk and Twitter agreed to an acquisition deal after weeks of back-and-forth between the company and the world’s richest person. Musk first agreed to join Twitter’s board, then backed out of the position. Then he launched his hostile takeover bid for the company, which the board eventually accepted this week.
[Insert: Even that headline should be why does he want to buy.]
Musk has said he wants to promote free speech on Twitter, which he’s said has become a de facto town square for the world. But some critics and Twitter employees have expressed concern that Musk will roll back the safety guardrails the company has put in place to try to prevent hate speech and extremist content from spreading on the site.
George Bernard Shaw defined in his play Major Barbara, premiered in 1905 and first published in 1907, a new type of Oligarchy namely the intellectual oligarchy that acts against the interests of the common people: “I now want to give the common man weapons against the intellectual man. I love the common people. I want to arm them against the lawyer, the doctor, the priest, the literary man, the professor, the artist, and the politician, who, once in authority, is the most dangerous, disastrous, and tyrannical of all the fools, rascals, and impostors. I want a democratic power strong enough to force the intellectual oligarchy to use its genius for the general good or else perish.”[7]
5 putin oligarchs have now come up dead this year of mysterious/suspicious means. Most likely these are people who were outspoken against pooty or were bickering with him.
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