Elon Musk may try to reprice $44bn Twitter bid, says US short-seller
A US firm known for betting against companies’ share prices has said Elon Musk could submit a lower bid for Twitter, owing to a slump in tech stocks and a weak financial performance at the social media platform.
Hindenburg Research said there was a “significant chance” that the Tesla chief executive will seek to pay less than the agreed bid price of $54.20 (£43.90) a share, which values Twitter at $44bn and has been accepted by the company’s board.
“We are supportive of Musk’s efforts to take Twitter private and see a significant chance the deal will close at a lower price,” said Hindenburg in a note published on Monday.
It said the tech-dominated Nasdaq stock market had fallen sharply since the world’s richest person revealedhe had taken an initial stake in Twitter on 4 April, implying a lower share price for the social media plaform, whose value has been held up by the takeover situation. Hindenburg said that if Musk walked away, Twitter’s shares could be caught up in the negative sentiment surrounding the Nasdaq and fall by 50%.
Hindenburg added that Twitter’s recent quarterly results had been poor and had not been priced into the stock, while Musk could pay a $1bn breakup fee to walk away from the deal. The investment research firm also dismissed speculation that Twitter could enforce a clause in the takeover agreement that required the multibillionaire to complete the deal.
“Musk has incredible leverage to renegotiate should he choose to,” said Hindenburg, which said it had taken a short position on Twitter. A short position is where an entity borrows shares in a company in the expectation that the price will fall. The entity sells those shares and then expects to buy them back at a lower price before returning them to
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