Source: Zhitong Finance APP
Musk tweeted on May 13 that the deal to acquire $Twitter (TWTR.US) $ was on hold pending a review of the bots on the platform. Investment firm Wedbush Securities said Musk’s move may have been an attempt to lower the price of the acquisition or to abandon the acquisition.
Analyst Dan Ives noted that events on Friday and over the weekend, including the possible breach of a non-disclosure agreement by Musk, left Wall Street “bewildered” about what would happen next.
Ives also pointed out in a report: “We believe that the acquisition price of $54.20 per share is now out of favor on Wall Street. Musk will either push for a lower transaction price or may walk away from the acquisition.”
The analyst also believes that Musk’s stated concerns about junk robots are “clearly at work right now,” despite Twitter saying they account for less than 5 percent. While former Twitter CEO Jack Dorsey “handles most of these issues,” the problem with spambots isn’t a surprise.
While Musk is likely to remain committed to buying Twitter, changing sentiment in the stock market and risk environment could cause Musk to “cringe” and make a lower offer.
Ives said the harsh reality facing Twitter was that no other strategic or financial bidder would make the deal, and Musk was aware of that. That’s why Ives believes the $44 billion Twitter deal is less than 50% likely to be completed as of today, given the changing market and Tesla’s loss of about $300 billion in market value since the offer was launched. sex. Musk is likely to walk away from the deal because he only has to pay a “breakup fee” of $1 billion.
Additionally, Ives noted that Twitter’s board is in a “difficult situation.” If Musk did offer a lower price and the company declined, Twitter’s stock could fall below the $30 level in a volatile stock market.
Shares of Twitter were down nearly 5% at $38.71 as of press time, about a 30% discount to Musk’s offer.
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