Market Cap for Twitter now down $9 Billion below the Purchase Price of Musk
Shares of the social media company Twitter have dropped nearly 13% since reaching a high for 2022 in April...
Shares of the social media company Twitter have dropped nearly 13% since reaching a high for 2022 in April as Elon Musk pursues his finalization of ownership. Some investors are even claiming the deal will never reach the finish line. As of market close yesterday, the stock tumbled to $45.08, nearly $10 below the $54.20 mark Musk agreed to pay on April 27th.
Twitter’s board has approved Elon Musk’s purchase, the deal can still take months to officially close with no guarantee that it will reach that mark. Musk would have to pay a $1 Billion fee if he were to choose to walk away.
According to Mark Mahaney, “The market is having marginally less confidence that the deal will go through due to regulatory challenges.” Before the bid, Musk failed to disclose more than a 9% stake in the company within the preferred 10-day window. The FTC is probing the timing of Musk’s disclosure according to reports. It is also being reported that the FTC is reviewing the acquisition itself. The FTC doesn’t disclose ongoing investigations, and an FTC spokesperson declined to comment.
According to the analyst of Dan Ives of Wedbush Securities, there is a 90% chance that the deal goes through with a few things pressuring the stock. The shares would only be valued in the $20 range if they remained a public company. Also, Musk’s financing of the acquisition presents greater risk and uncertainty.
Today, it was reported that Musk claimed that he is in talks to raise equity and preferred financing to eliminate the need for a $6.25 Billion margin loan tied to his Tesla shares.
“This is a soap opera,” Ives said. “It’s going to have many different chapters.”