Business

TWTR stock price at $52 shows Musk/Twitter saga coming to a close

TWTR stock price at $52 shows Musk/Twitter saga coming to a close thumbnail
  • TWTR closes up 22.2% after Musk agrees to go through with acquisition.
  • Tesla stock falls in premarket on the news.
  • Musk says Twitter is part of his designs for a superapp.

If you have been living under a rock for the last 24 hours, you may not have heard that Elon Musk has decided to buy Twitter (TWTR) for the original price of $54.20 agreed to back in April. …And so our corporate fairy tale finally starts on its road to a conclusion.

Musk was scheduled to be deposed later this week, and some pundits think the likelihood of failure in extricating himself from his agreement to buy the social media platform back in April was the major reason for wanting to end the current litigation.

Either way, Twitter has agreed to the acquisition, and TWTR stock zoomed up 22.2% to close at $52. Carl Icahn reportedly profited about $250 million by holding onto TWTR when Musk tried to exit the deal in July and shares fell to $31.52.

Twitter stock news

According to reporting from The Financial Times, Musk’s lawyers held a Zoom (ZM) call with Judge Kathaleen McCormick from the Delware Chancery Court and Twitter representatives early on Tuesday. The parties agreed to go through with the original acquisition framework, but Twitter has requested new stipulations on timelines and deliverables.

Late Tuesday, Musk’s legal team filed its intent with the Securities & Exchange Commission (SEC). The relevant section of the filing reads: “On October 3, 2022, the Reporting Person’s advisors sent a letter to Twitter (on the Reporting Person’s behalf) notifying Twitter that the Reporting Person intends to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM), and adjourn the trial and all other proceedings related thereto pending such closing or further order of the court.”

READ:  Algeria Says It Respects All Gas Commitments With Spain

A spokesperson for Twitter stated that the “intention of the company is to close the transaction at $54.20 per share”. Now the only thing that stands in the way for the deal going through is ensuring that the financing is there. A number of Wall Street banks had already signed up for $13 billion in financing, which may be more difficult now that interest rates are racing higher. More of the debt may have to come from the banks themselves rather than outside clients. Binance, the crypto exchange, also had agreed to put up $500 million for the deal, and Oracle founder Larry Ellision had said he would put up at least $1 billion.

That leaves Musk, who already owns 9.6% of Twitter, to come up with the other $25 billion or so. Plenty of other institutions will likely be brought into the fold, but the market is still thinking Musk will need to sell a further chunk of Tesla stock. TSLA gained 2.9% in Tuesday’s regular session, but is off 1.5% in Wednesday’s premarket.

For his part, Musk decided to forget about his mid-Summer fight over the number of bots on the social network and focus on the possibilities. He posted that Twitter would become part of an “everthing app” called X, which of course reminds one of his vaunted X.com startup that eventually merged to become part of PayPal (PYPL).

Twitter stock forecast

Technically, if you buy TWTR stock at $52, then you could make 4% when the acquisition is finalized. With 10-year treasuries still at 3.6% though and Musk requiring financing in a poorer investing climate, TWTR should remain at a discount until the end. Below you can see how both TWTR and TSLA reacted to the news release. TWTR ran up over 22%, and TSLA sold off after adding 2.9% in the regular session.

READ:  Shiba Inu price can rally 600% from current levels, but SHIB to stay under a cent: Analyst

TWTR vs TSLA 1-minute chart for 10/4/22

If this is indeed the end, how did TWTR do as a public company? The answer is: simply awful. If you had bought TWTR near its height in December 2013 (nearly 10 years ago), you would have lost money at Musk’s acquisition price. Twitter will continue, but as a public stock it has never amounted to a solid business. Instead it might even be its lackluster corporate prospects that have endeared it to so many fans, myself included.

TWTR monthly chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

READ:  Analyst Maps the ETH Price Target on the Day of Ethereum Merger!

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Read More

Learn More: business analyst salary, business synonym, business administration jobs, business near me, business hours, business development manager salary, my business course, business in spanish, business headshots, business first, business unit, business brokers near me, dbusiness, 2 business days, is business administration a good major, business horizons, 7 business days, business knowledge, business use case.

Leave a Reply

Your email address will not be published. Required fields are marked *