Twitter deal with Elon Musk for $44 bn looks done and dusted – What should investors do now?

Share price of Twitter is already up by almost 38 per cent since Twitter’s closing stock price on April 1, 2022.

Twitter share price, Elon Musk, stockholders, retail traders, stock
Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.

Twitter (TWTR) has finally announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share. The acquisition of Twitter by Elon Musk is at approximately $44 billion. Once the deal gets completed, Twitter will become a privately-held company. Twitter stock is struggling to hold ground after the market opened on Tuesday and trades around $50.15, a clear 3 per cent lower than previous closing.

Twitter stockholders will receive $54.20 for each share of Twitter they hold upon closing of the proposed transaction. The completion of the deal is expected to be over in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.

In this situation when the share price of Twitter is already up by almost 38 per cent since Twitter’s closing stock price on April 1, 2022, which was the last trading day before Musk disclosed his approximately 9 per cent stake in Twitter, what should investors do now?

“From an investment or trading perspective, there isn’t a lot you can do here. And once the deal closes, Twitter will become a private company. In these situations, if you’re long stock and want to wait out the close of the deal and capture the extra $1 or $2, that’s fine.

If you’re not in the stock, it’s probably not worth getting in at this point for most retail traders.

What I’m actually more interested in is whether or not we’re going to see more takeover plays. You have a number of stocks that have really been beaten down and who knows, maybe this will spur some M&A activity,” says Scott Sheridan, market expert, and CEO – Tastyworks.

Bret Taylor, Twitter’s Independent Board Chair, said, “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”

Parag Agrawal, Twitter’s CEO, said, “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Musk.

“I also want 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,” added Musk.

Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment. There are no financing conditions to the closing of the transaction.

Twitter plans to release its first quarter fiscal year 2022 results before the market opens on April 28, 2022.

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