Twitter shares climb as it accepts Musk’s $44 billion takeover offer

Posted: 25 April 2022 10:12 am
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Twitter agreed to be taken over by Elon Musk. What do investors stand to gain?

Shares of Twitter (TWTR) climbed about 6% as the company agreed to accept billionaire Elon Musk’s $44 billion takeover offer in a deal that will take the publicly-listed social media platform private.
Holders of the company will get $54.20 in cash for each share of Twitter common stock that they own, a 38% premium to Twitter‘s closing stock price on April 1, the last trading day before Musk disclosed his about 9% stake in in the company, according to a press release.
Musk negotiated the purchase in his personal capacity and Tesla (TSLA), which he runs, isn’t involved, Reuters said earlier when it reported that the deal could be announced today.
“The Twitter board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Bret Taylor, Twitter’s independent board chair, said. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
The deal is expected to close this year, subject to approval of stockholders and regulatory approval. There are no financing conditions to the closing of the deal, Twitter said in a press release.
Musk said he wants to make “Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
Musk said last week he has secured commitment for $46.5 billion to fund the Twitter purchase. That includes $13 billion in financing, $12.5 billion in margin loans and $21 billion equity financing, according to his filing with the Securities and Exchange Commission (SEC) last week.

Thinking of buying Twitter stock?

Last week, several analysts downgraded shares of Twitter following Musk’s announcement to buy the platform, citing limited upside potential for the stock.
The deal gives Twitter shareholders with modest gains. The price tag represents an 11% premium over Friday’s close price of $48.93. The stock traded at around $51.86 at 3:39 pm in New York.

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At the time of publication, Matt Miczulski owned shares of TWTR.

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