Elon Musk could get a big discount on his Twitter takeover


Elon Musk’s “best and last offer” for Twitter could be renegotiated in favor of the Tesla CEO, who could end up getting a discount on the takeover price. Hindenberg Research, an investment firm specializing in short selling, believes Musk is now in complete control of the turn of events on Twitter, Reported Money Control.

When Musk formally presented his proposal to acquire the social media platform last month, the board was hesitant and pushed for a rights plan to prevent a hostile takeover. The move would put Musk on his back while giving the board time to seek other offers. The board likely approved the deal quickly due to the lack of competitive bids; and now it looks like Musk holds all the cards to the deal.

What has weakened Twitter’s position in the market?

On its website, Hindenburg Research has listed the series of developments that have taken place since Musk’s offer weakened Twitter’s position. Amid the US Federal Reserve’s tightening economic policy, the tech-heavy Nasdaq fell more than 17%. If Musk walks away from the deal, Twitter stock which is currently around $48 could drop to $31, according to the post.

Days after accepting Musk’s offer, Twitter released its quarterly results which were not only disappointing but also acknowledged that its user base was overstated by around two million users. In his offer, Musk had said that if the board rejected his offer, he would offload his narrow stake in the company, which would further drag the company’s valuation.

If the deal doesn’t go through, Musk could get away with paying just $1 billion in severance pay, which is peanuts for the richest person on the planet.

Hindenburg’s Twitter account also posted this, to which none other than Elon Musk himself responded.

Musk’s positive reference is likely related to the fact that if Twitter was cheaper at the end of the deal, it wouldn’t have to raise as much money. Musk’s Twitter buyout has already spooked Tesla investors, who believe the main funding will come from Musk offloading Tesla stock.

Analysts also told Money Control that they expect the Twitter deal to close at Musk’s offer price unless Musk changes his mind.

We’ll have to wait a bit longer to see how that plays out. Clearly, the drama of Elon Musk’s acquisition of Twitter continues.

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