Twitter (TWTR Stock) shares rise after Musk's announcement
|After months of negotiations and legal battles, the takeover of Twitter by the world's richest man (his fortune is estimated at US$228 billion) could happen for $44 billion. Following the news, Twitter shares gained a whopping 22.1% in the last trading session.
Musk had been trying to unwind his April deal to buy Twitter for months. The billionaire began showing signs of having a change of heart shortly after the deal was announced, claiming that Twitter had misled him about the size of its user base and the prevalence of bots on the platform.
The owner of Tesla and SpaceX formally walked away from the deal in July, but Twitter sued in Delaware to force it to complete the purchase. The trial was due to begin on 17 October, and the judge on Tuesday asked both sides to return to court with a proposal for how the case should proceed. According to Bloomberg reports, on Monday Elon Musk resubmitted an offer to Twitter to buy the company at an initial price of $44 billion (or $54.2 per share), presumably to avoid a lawsuit.
Today, Twitter shares are down 0.6% before the market opens, finding themselves $2-3 below Musk's offer price ($54.2). It is possible that the deal can be expected to be finalised quickly due to the takeover offer at an initial attractive price from the billionaire.
Leading Wall Street firms' current target prices are $54.20 from Citi, $54.20 from Wedbush, $43.00 from Truist Securities, $54.00 from Baird Equity Research and $54.00 from CFRA. In contrast, all of this week's recommendations cite Musk's offer price as a target price for the company's shares.
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