Elon Musk’s Twitter bid is now a “Friday the 13th horror show,” Wedbush’s’ Dan Ives wrote in a note. Musk tweeted Friday that his bid for the social media company was on hold. Musk later reiterated his interest and that he’s “still committed to acquisition”. Loading Something is loading.
Elon Musk’s deal to take Twitter private has become a “circus show,” Wedbush’s Dan Ives wrote in a note Friday morning, with the analyst eyeing several potential outcomes to the saga.
Ives’s comment follow in the wake of Musk’s early morning tweet that the deal was on pause over concerns over the number of fake accounts on Twitter. Shares of the social media company fell as much as 25% in pre-market trading after the tweet, paring the loss to about 9% and trading at $40.91 as of 10:08 a.m. ET.
Musk clarified a few hours later in a follow-up tweet that he was “still committed to acquisition.”
Ives noted three possible paths from here given the latest developments, with the first being Wall Street will see Musk’s tweets as a sign the deal is nowhere close to getting done.
“The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us and the Street and now sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward,” Ives wrote.
Another possibility, according to Ives, is the new developments open the door to Musk re-negotiating the terms and price of his bid. Twitter’s stock price is well below Musk’s offer of $54.20 per share, and one prominent short seller last week said that the Tesla CEO is in total control and could re-price the deal to better reflect conditions in the market and at the company level.
Musk could also walk away from the deal entirely for a breakup fee of $1 billion, Ives said. Musk has already “vastly changed the market,” and his comments Friday bring into question the pillars of the deal thus far, like his outside financing and investor positions.
Ives says that the turbulence could be a positive sentiment for Tesla shares as “now the Street will view the chances of a deal as less than 50%.” Tesla stock has sagged by over 20% since Musk first disclosed his 9.2% stake in Twitter and began negotiations to take it private in early April.
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