Twitter investors have signaled skepticism about the Elon Musk deal

Twitter investors have signaled skepticism about the Elon Musk deal

SAN FRANCISCO – Twitter investors were alarmed by the possibility of stock prices falling far below his offer on Wednesday as they could go through a takeover deal with Elon Musk.

Musk agreed to pay $ 54.20 or about $ 44 billion per share for Twitter, but the share price fell to $ 48.26 during trading on Wednesday, indicating that some investors doubt the deal will succeed, analysts said.

The CEO of the electric car company Tesla outlined plans to buy Twitter with a loan from the bank and financed about half of it with his own equity, probably from Tesla shares.

Tesla’s price more than doubled on Twitter on Tuesday

Although the Twitter acquisition deal is expected to expire in 2022, two areas of suspicion emerged on Tuesday.

Tesla’s stock plunged 12 percent on Tuesday, cutting the car company’s value by more than $ 100 billion and raising questions about Musk’s ability to pay because its total value hit nearly $ 30 billion.

And further terms of the deal were revealed, including a $ 1 billion breakup fee, which analysts say is not enough to prevent both parties from moving away.

Dan Ives, an analyst at Wadebush Securities, said: “The roadblocks are starting to set in and the deal will not happen and the mask is likely to go off.”

Twitter’s stock fell nearly 3 percent on Wednesday afternoon. Tesla, by contrast, got up on Wednesday after being beaten the day before. Ives says the inverse relationship between the two stocks will not be fruitful for the mask.

Market expert Scott Sheridan, CEO of online brokerage Tastyworks, cautioned against reading too much about what a one-day stock movement could mean for the deal.

“It’s hard to say whether Tesla fell so much in sympathy for the market yesterday or whether the market fell in sympathy for Tesla,” he said in an email. “Either way, if it continues, it will put a potential wrench in Elon’s plans to buy Twitter because it will have to sell Tesla stock to cover some funding.”

Musk and Twitter agreed an acquisition deal after weeks of running between the company and the world’s richest man. Musk first agreed to join Twitter’s board, then moved away. He then launched his unfavorable takeover bid for the company, which the board finally accepted this week.

Why did Elon Musk buy Twitter?

Musk says he wants to promote freedom of speech on Twitter, which he says has become a de facto town square for the world. But some critics and Twitter activists have expressed concern that the Musk site would withdraw security guards set up by the agency to prevent the spread of hate speech and extremist content.

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