Tesla CEO Elon Musk’s surprise $ 43 billion, self-proclaimed Twitter bid kicked off a tumultuous week for the social media giant and his investors, who closed with the “poison pill” on Friday through its board of directors. Twitter to stop Musk in his footsteps. Now everyone is guessing what will happen next. FOX Business takes a deep dive into the latest developments and forecasts of investors and analysts.
Poison pill boomeranging ?: Wedbush’s Ives
Wedbush’s debt analyst Dan Ives told FOX Business on Friday that Twitter’s move to prevent Musk’s acquisition was a “predictable defense measure” that “will not be viewed positively by shareholders, given the potential negative and non-negative friendly takeover move “. Elon Musk gestures as he speaks during a press conference at SpaceX’s Starbase facility near the village of Boca Chica in South Texas on February 10, 2022. (Photo by JIM WATSON / AFP via Getty Images / Getty Images) Under the plan, which is also referred to as a “poison pill,” shareholder rights will be exercised if an entity, person, or group acquires 15% or more of the common stock of Twitter in an unapproved transaction. the board of directors. Should the rights become enforceable, existing Twitter shareholders — other than the individual, entity, or group that activates the program — will be entitled to purchase additional common stock at a discount. Musk currently has one 9.2% share on Twitter. “The board has its back to the wall and Musk and shareholders are likely to challenge the benefits of the poison pill in court,” Ives explained. “We believe that Musk and his team were waiting for this poker move to be seen as a sign of weakness, not strength, from the street.” TWITTER FACES ‘FULL BLOWN ELON CIRCUS’: ΑΝΑΛΥΤΗΣ
Musk and Twitter are fighting for the next move
From now on, Ives says Musk will have to give details of his funding for the $ 43 billion offer and return to Twitter’s board with an official response. Meanwhile, he expects Twitter to launch a strategic process to find other buyers. Ticker Security Last change% TWTR TWITTER INC. 45.08 -0.77 -1.68% Musk, who offered to make Twitter private on $ 54.20 per share, has stated that the $ 43 billion offer is his “best and final” offer. However, he revealed to TED2022 on Thursday that he is prepared with a “plan B” if the offer is officially rejected. He did not specify the details of this plan.
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FORMER PRESIDENT OF THE SEC
Stay tuned Twitter: T3 Trading
T3 Trading chief strategist Scott Redler believes investors should go to great lengths on Twitter, arguing that the company is currently an “undervalued” and “mismanaged” asset that could become a platform for improvement. of society. JMP Securities’s research analyst Andrew Boone and T3 Trading CSO Scott Redler analyze the billionaire businessman’s bid for the social media giant on “The Claman Countdown.” “I do not think Twitter should be a private company. I think Elon should be on the board. It would be better if he bought 14%, so he could have shaken the tree,” Redler told The Claman “. Countdown “on Thursday. “I think the company could do better. I think the potential could be more up-to-date. I think they could get more users. They could make more money. And that’s what Elon was trying to do.” “But now with this $ 54 offer, it just was not enough, and now it is turning into a small mess where the market does not believe it, the board does not know what to do and can come. higher, even though he said the best and the final, which is never really better and final, “Redler adds. “So it has created an precarious situation where it will be interesting to see how it all falls apart.” GET FOX BUSINESS IN ENGINE BY CLICKING HERE
Twitter can, should improve its product: JPMorgan
JPMorgan analyst Doug Anmuth told customers that Musk’s offer was “credible” and “represents a 54% premium from where TWTR traded before acquiring shares.” However, it acknowledges that it is also well below the company’s highs in March 2021. The company maintains a rating of “overweight” in the stock. “We believe that stocks will have a significantly higher uptrend if management is able to carry out its plan to innovate in the product, increase the user base by ~ 20% and generate instant response advertising,” Anmuth said in a note Thursday. “Therefore, we do not expect the proposal to be accepted by the board.”
Declining risk for equities: Stifel
Stifel analyst Mark Kelley, meanwhile, believes the offer “sets a short-term share ceiling, distracts the company from fundamentals and offers a significant risk of falling if Mr Musk decides to abandon his offer or sell his share “. Stifel downgraded the stock from “hold” to “sell” and warns that a rejection of the offer could cause a “dramatic sale” of Twitter shares.
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Could Twitter be looking for an investor consortium ?: Jefferies
Jeffries, who maintains a rating “held” on Twitter, notes that a sale of more than 20% on a rejected Twitter bid “would definitely have value to a strategic investor.” “In our view, this could be a positive outcome, as TWTR would probably prefer a consortium of investors rather than being controlled by a single large owner,” Jeffries analyst Brent Thill told customers Thursday. Thill believes Twitter is probably looking for an offer of at least $ 60 per share.
