Twitter shares cruise towards Musk’s offer price as deal deadline looms
By Medha Singh
(Reuters) – Twitter Inc’s stock inched closer to Elon Musk’s $54.20 per share buyout offer for the micro-blogging site on Wednesday, signaling that investors finally expect the deal to go through ahead of a court deadline at the end of this week.
Shares of the social media company were last up 0.3% at a near seven-month high of $52.94, the closest they have come to Musk’s offer since it was announced in mid-April.
Market doubt seems to be waning but has not yet completely gone away,” said Randy Frederick, managing director of trading & derivatives at Schwab Center for Financial Research.
In the six months of dramatic back-and-forth since Musk announced his bid, Twitter initially resisted the deal by adopting a poison pill and later sued the world’s richest man after he announced plans to abandon his offer on concerns about spam accounts on the platform.
Twitter shares dropped as low as $32.50 in July.
Earlier this month, Musk proposed to proceed with his original $44 billion bid, calling for an end to a lawsuit by the social media company that could have forced him to pay up, sending Twitter shares 24% higher.
Tesla CEO has notified co-investors who committed to help fund his $44 billion acquisition of Twitter that he plans to close his buyout of the social media firm by Friday, a person familiar with the matter told Reuters on Tuesday.
The banks providing $13 billion in financing for the deal have abandoned plans to sell the debt to investors because of uncertainty around Twitter’s fortunes and losses, Reuters reported last week.
“Wall Street is motivated to curry favor with Musk,” said Jason Benowitz, senior portfolio manager at The Roosevelt Investment Group LLC.
“Elon Musk leads significant businesses including Tesla, SpaceX, and soon, Twitter … that may require substantial capital raises in the future. If SpaceX were to one day have an initial public offering it would be a flagship deal for the investment banking industry.
(Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Vinay Dwivedi)
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