Investors speculating on whether Elon Musk will complete his $ 44 billion Twitter acquisition sent shares of the social media company on Wednesday at the lowest level since the deal was announced two days ago.
Traders are concerned that Musk may not have enough money to fund his $ 21 billion contribution and may decide to sell some of his shares to Tesla to come up with it. You have already backed down. Earlier this month, he decided at the last minute not to join the Twitter board. In 2018, Musk wrote on Twitter that there was a “secure sponsorship” of the $ 72 billion deal to take Tesla secretly, but he did not go ahead with the proposal.
In addition, Musk will only have to pay an estimated $ 1 billion in dividends – part of his estimated $ 240 billion – to move away from the purchase. complete the agreement, “said Chris Pultz, portfolio manager for arbitrage integration at Kellner Capital. Musk’s representatives did not immediately respond to requests for comment.
Twitter shares eliminated trading in New York fell 2.1% to $ 48.68, a major discount on the $ 54.20 deal, which is 62% more likely that the deal will be terminated.
That is a low chance of concluding agreements, investors say, as there is little chance that Musk, who has no other media outlet, could face a lot of mistrust. Tesla shares fell more than 12% on Tuesday, erasing $ 126 billion, amid concerns Musk will have to sell shares to the electric car maker to pay a $ 21 billion equity check on the Twitter deal.
Musk can alleviate some of the jitters in the market by providing more information about the source of his financial support or bringing in colleagues to help him split the check. This, however, may present a new risk to the agreement based on the knowledge of these partners, some fund managers said. Roy Behren, a senior member of Westchester Capital Management, with less than $ 5.4 billion in assets under management, said $ 1 billion was terminated. “It was not high enough to make Musk think twice about leaving the contract.
