Elon Musk’s $44 billion ($3,398.7 billion) bid to take Twitter private could be repriced if the world’s richest man walks away from the deal, short-seller Hindenburg Research warned on Monday.
“Musk has all the cards,” Hindenburg, who has a short position on Twitter, said in a note. “If Elon Musk’s bid for Twitter disappears tomorrow, Twitter stock will fall from current levels. 50%. Therefore, we think there is a lot of risk in the repricing of the deal.”
Shares in the social media platform fell 4% to touch $47.76 (about Rs 3,690) amid broader market losses, since Musk made an offer of $54.20 (about Rs 4,190) per share in April the lowest level, calling it “the best and the ultimate”.
Twitter declined to comment.
“Interesting. Don’t forget to look at the good side of life once in a while!” Musk tweeted a lighthearted response, with short sellers saying Tesla shareholders are expected to pay if the deal goes through at a “more reasonable price.” thank him.
Hindenburg said there has been some progress on the deal, from financing to board approval, that could weaken Twitter’s position.
“We support Musk’s efforts to take Twitter private and believe there is a good chance the deal will be done at a lower price,” Hindenburg said.
The short-seller said the Tesla CEO could leave with a $1 billion (roughly Rs 7,725 crore) breakup fee and would have incredible leverage if he chooses to renegotiate .
Last month, Twitter secured a $44 billion (339.87 billion rupee) cash deal to sell itself to Musk, who received more than $70 million from prominent investors including Oracle co-founder Larry Ellison. billion (approximately 540.8 billion rupees). and Sequoia Capital.
CFRA Research analyst Angelo Zino said the deal is likely to close at the stated offer unless Musk changes his mind.
© Thomson Reuters 2022