Amid Musk’s takeover talks, Twitter shares see a surge
The social media platform giant Twitter’s shares soared after the Wall Street Journal reported that the company is nearing a deal with Elon Musk, the world’s richest man and that the announcement could come as soon as Monday night. The board negotiated with Musk into the early hours of Monday.
Meanwhile, Twitter is set to report first-quarter earnings on Thursday. Musk, who owns Tesla and SpaceX, built up more than 9 percent in Twitter stock and turned down an offer to join the board before putting in a bid.
Twitter shares fired up nearly 6 percent in the afternoon, chiefly because of media speculation that the deal was expected after market close, if not sooner.
Musk claims it needs to be “transformed” into a private company so it can become a forum for free speech. He has also said that Twitter’s board members’ interests “are simply not aligned with shareholders” and that the board “owns almost no shares” of the company.
The company’s board met on Sunday to discuss Musk’s financing plan for his proposed bid, as per sources. The two sides could reach an agreement as soon as Monday. It’s unclear what a final deal could look like. As if to hedge its bets somewhat, an agreement could still fall apart, said reports.
Earlier this month, Musk offered to buy Twitter for $54.20 a share, or about $43 billion. Twitter’s board of directors met on Sunday to discuss Musk’s financing plan. So far, the social media giant was expected to decline a deal, which includes Musk’s plan to take it off the stock market.
Twitter had adopted a so-called poison pill to fend off a potential hostile takeover. However, the company betrayed greater receptivity after Musk revealed he secured $46.5 billion in financing.
Wall Street was likely to view the news of Twitter’s openness to a bid “as the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix”, said a note by Wedbush analyst Dan Ives.
[With Inputs from IANS]
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