Fox News Headlines 24/7 sports reporter Mike Gunz Gunzelman says Elon Musk is “unpredictable” after Tesla’s chief executive announced he had a backup plan to buy Twitter.
Tesla CEO Elon Musk’s surprise unsolicited offer of $ 43 billion for Twitter kicked off a tumultuous week for social media giant and its investors, culminating in Friday’s “poison pill” via Twitter to stop Musk from following. mu.
Now everyone can guess what will happen next. FOX Business is deeply immersed in the latest developments and what investors and analysts predict.
Does a poison pill have the opposite effect ?: Ive on Wedbush
Wedbush stock analyst Dan Ives told FOX Business on Friday that Twitter’s move to prevent Musk’s takeover was a “predictable safeguard” that “will not be viewed favorably by shareholders given the potential dilution and unfriendly acquisition.”
Elon Musk gestures as he speaks at a press conference at the SpaceX 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, also called the “poison pill,” shareholders’ rights will be exercised if a legal entity, person or group acquires actual ownership of 15% or more of ordinary Twitter shares in an unauthorized board transaction. . In the event that the rights become exercised, existing shareholders on Twitter – with the exception of the person, entity or group triggering the plan – will be entitled to purchase additional shares from ordinary shares at a discount. Musk currently has a 9.2% share on Twitter.
“The council has its back to the wall and Musk and shareholders are likely to challenge the merits of the poison pill in court,” Ives said. “We believe that Musk and his team were expecting this poker move, which will be perceived as a sign of weakness, not strength from the street.”
TWITTER confronts “FULL PERFORMED CIRCUS ILON”: ANALYSIS
Musk and Twitter are fighting for the next move
In the future, Ives says Musk will have to give details of his funding for the $ 43 billion offer and return to the Twitter board with an official response. Meanwhile, he expects Twitter to launch a strategic process to find other buyers.
Ticker Security Last Modified Change% TWTR TWITTER INC. 45.08 -0.77 -1.68%
Musk, who offered to make Twitter private $ 54.20 per share, said the $ 43 billion offer was his “best and last” offer. However, he revealed to TED2022 on Thursday that he was prepared with a “Plan B” if the offer was formally rejected. He did not specify the details of the plan.
Twitter has been sharing since the beginning of the year
GOVERNMENT PREVENTS MUSK’S OFFER ON TWITTER IS A “VERY REAL THREAT”: FORMER SEC PRESIDENT
Stay Long Twitter: T3 Trading
Scott Redler, chief strategist at T3 Trading, believes investors need to go long on Twitter, arguing that the company is currently an “undervalued” and “poorly managed” asset that has the potential to become a platform for improving society.
JMP Securities equity analyst Andrew Boone and T3 Trading CSO Scott Redler are analyzing the billionaire entrepreneur’s bid for social media giant The Claman Countdown.
“I don’t think Twitter should be a private company. I think Elon should be on board. It would be better if he bought 14% so he could shake the tree, “Redler told The Claman Countdown on Thursday.” I think the company can be run better. I think the features could to 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 to some extent. ”
“But now with this $ 54 offer, it just wasn’t enough, and now it’s becoming a bit of a mess that the market doesn’t believe in, the board doesn’t know what to do and he can go higher, even though he said the best and final, which is never really the best and final, ”adds Redler. “So he created an uncertain situation in which it would be interesting to see how things turn out.”
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Twitter may need to improve its product: JPMorgan
JPMorgan analyst Doug Anmouth told customers that Musk’s offer was “credible” and “represents a 54% premium from where TWTR traded before it acquired shares.” However, he admits that it is also well below the company’s highest values since March 2021. The company maintains a rating of “overweight” shares.
“We believe that stocks will increase significantly if management is able to meet its product innovation plan, increase its user base by ~ 20% and build direct response advertising,” Anmouth said in a note Thursday. “Accordingly, we do not expect the proposal to be accepted by the board.”
Risk of stock reduction: Stifel
Stifel analyst Mark Kelly, meanwhile, believes the offer “sets a short-term share ceiling, separates the company from the fundamentals and offers a significant risk of decline if Mr Musk decides to drop his offer or sell his stake.” Stifel downgraded the shares from “holding” to “selling” and warned that a rejected offer could lead to a “dramatic sale” of shares on Twitter.
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Twitter may be looking for a consortium of investors ?: Jefferies
Jeffries, who maintains a rating of “holding” Twitter shares, notes that a sell-off of more than 20% if a bid is rejected on Twitter would “definitely be a value for a strategic investor.”
“We think this could be a positive result, given that TWTR is likely to prefer a consortium of investors instead of being controlled by one large owner,” Jeffries analyst Brent Thill told customers on Thursday.
Thill believes Twitter is probably looking for an offer of at least $ 60 a share.
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