After six months of the public and legal battle over the purchase, Elon Musk finally completed his $44 billion acquisition of Twitter Inc., according to people familiar with the situation, placing the world’s richest man in charge of the faltering social network.
Twitter on Thursday closed 0.6% higher than the previous day’s close, at $$53.70. The TWTR stock price is at the same level as it was 12 months back. In 2022 so far, the stock price of Twitter is up by almost 24%.
Going forward, Twitter will now be a private company and shareholders will receive $54.20 per share. The company’s shares are no longer expected to trade on the New York Stock Exchange. According to the website of the New York Stock Exchange, trading in Twitter Inc (TWTR.N) shares will be suspended on Friday because entrepreneur Elon Musk has until October 28 to complete his $44 billion acquisition of the social media giant.
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“Twitter’s deal will not have an impact on the stock markets. Anyways the company shall go private hereon. Although, if you look at the recent price action in stocks like Meta, there is clearly a lot of pressure on NASDAQ-listed top tech companies in the US with social media companies being banned in various countries and some of them being heavily fined. This is in line with the expectations if you look back at the exchanges between Musk and Agarwal over the last few months. There is news around Elon Musk proposing himself to assume the role of CEO of Twitter, and removing the lifetime bans on some of the users” says Divam Sharma, Co-Founder at Green Portfolio, a SEBI registered portfolio management service provider.
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“Elon Musk has been in the news for his extreme views and this rejigging of Twitter operations might have an impact on the neutrality and abuse policies of the social networking platform as the company goes private. No doubt, Musk will go all in to ensure a turnaround and profitability for the company and take all it takes to ensure this,” adds Sharma
Since Musk openly entered the chat in April, Twitter’s business, which relies primarily on the advertising displayed in users’ news feeds on its social network, has struggled. The firm recorded its first year-over-year sales loss since the pandemic’s peak in the second quarter, and although Twitter hasn’t yet made any preparations to declare earnings, it’s probable that the third quarter saw a similar slump.
The overall cost of purchasing Twitter is $44 billion. The banks had initially planned to offer leveraged loans worth $6.5 billion and trash bonds worth $6 billion, divided evenly into tranches that were secured and unsecured. They also offered a $500 million revolving credit facility, a particular kind of loan generally maintained by banks that Twitter will be able to borrow from and repay until maturity.