What Will Happen to Twitter Stock After Elon Musk Purchases the Social Media Company?
Following months of endless twists and turns, the $44 billion Twitter saga has finally come to an end and the “bird is freed,” as Elon Musk tweeted on Oct. 27. The New York Stock Exchange has suspended trading of the social media platform’s shares as of Oct. 28 before market open, according to a notice on its website.
But now, what happens to the Twitter stock?
The Washington Post reported that Musk has already fired CEO Parag Agrawal, CFO Ned Segal and Vijaya Gadde, head of legal policy, trust and safety.
In addition, Musk intends to hold a companywide town hall Oct. 28 and the company is set to become private the same day, dissolving its board of directors, per WaPo.
As for investors, they will be able to claim the cash value of their shares, The New York Times reported. As part of the $44 billion deal, this represents $54.20 a share.
Biggest Winners of Twitter Deal: Former Shareholders
Barron’s weighed in on the acquisition, indicating that, “The biggest winners of tech earnings season, of course, are Twitter’s former shareholders,” adding that while Musk finally agreed to the acquisition, he paid “way over the odds as the sector tanked.”
“That’s made Twitter the best tech investment this year for everyone except, perhaps, Elon Musk,” Barron’s concluded.
Hayden Hughes, co-founder and CEO of Alpha Impact, agreed with that premise, saying that within a few weeks, shareholders will receive their payments of $54.20 per share. Hughes said the deal “is widely considered to be great for shareholders, and somewhat less stellar for Musk,” as the economy and debt markets have deteriorated since he initiated talks with Twitter.
“Had Musk continued to negotiate through the summer, he would likely have secured a better deal due to the change in the economy. He was effectively forced to complete the deal, likely after his legal team advised him that going to trial in Delaware might prove to be a bad choice.”
Wedbush Securities analyst Dan Ives agreed in a note sent to GOBankingRates, suggesting that the $44 billion deal “will go down as one of the most overpaid tech acquisitions in the history of M&A deals on the Street in our opinion.” Wedbush argued that Musk buying Twitter “remains a major head scratcher,” with fair value that it would peg at roughly $25 billion.
“Musk took over Twitter last night and now major questions will remain around changes to the platform, monetization efforts, the level of headcount cuts on the horizon, and the long-term strategy around the ‘X’ App and building a potential WeChat model down the road,” Ives wrote in the note.
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