Twitter investors want out; Elon Musk also wants out – The Average Joe
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    Twitter investors want out; Elon Musk also wants out

    victorlei

    September 15, 2022

    On Tumbling Tuesday, Twitter finished as the second-best performing stock in the S&P 500. It turned out $TWTR was a strong hedge against market downturns this year — down only 3% while the S&P 500 is down 17%.

    $TWTR shareholders want the nightmare to be over… This week, Twitter received 98.6% shareholder approval to go ahead with an acquisition by Musk.

    But Musk is still trying to back out of the deal — previously arguing that a large portion of Twitter’s users are spam accounts. He received some mixed news on his efforts last week:

    • Bad news: A Delaware court denied Musk’s request to delay the trial
    • Good news: Musk was able to add claims from Twitter whistleblower Zatko.

    The trial is scheduled for October 17, and several hedge fund managers have built up sizeable stakes in Twitter — betting the deal will go through. Here’s what hedge fund manager David Einhorn told Bloomberg:

    • Odds: “If it were anyone other than Musk, we would handicap the odds of the buyer wiggling out of the deal to be much less than 5%.”
    • Law: “The incentive of the Delaware Chancery Court, the preeminent and most respected business court in the nation, is to actually follow the law and apply it here.”

    Other scenarios: Fund manager Chris Pultz thinks Twitter could settle at a 10-15% discount from the original $54.20 price. Investors, including Einhorn, expect $TWTR to fall to $20 if the deal falls apart.

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