Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Twitter, Musk battle escalates: Poison pill, Musk’s ‘plan B’ and a divided Wall Street

Twitter, Musk battle escalates: Poison pill, Musk’s ‘plan B’ and a divided Wall Street

Musk has offered $54.20 per share offer to take Twitter private

Tesla CEO Elon Musk's surprise $43 billion, unsolicited offer for Twitter kicked off a tumultuous week for the social media giant and its investors, which capped with Friday's ‘poison pill’ via Twitter's board to stop Musk in his tracks.

Now it's anyone's guess as to what happens next. FOX Business takes a deep dive into the latest developments and what investors and analysts are forecasting.

Poison pill backfire?: Wedbush's Ives


Wedbush securities analyst Dan Ives told FOX Business on Friday that Twitter's move to prevent a takeover from Musk is a "predictable defensive measure" that will "not be viewed positively by shareholders given the potential dilution and acquisition unfriendly move."

Under the plan, which is also referred to as a "poison pill", shareholders' rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the board. In the event that the rights become exercisable, existing Twitter shareholders — except for the person, entity or group triggering the plan — would be entitled to purchase additional shares of common stock at a discount. Musk currently has a 9.2% stake in Twitter.

"The Board has the back against the wall and Musk and shareholders will likely challenge the merits of the poison pill in the courts," Ives explained. "We believe Musk and his team expected this poker move which will be perceived as a sign of weakness not strength by the Street."

Musk and Twitter scramble for next move


Going forward, Ives says that Musk will need to give specifics behind his financing for the $43 billion bid and come back to Twitter's board with a formal response. Meanwhile, he expects that Twitter will kick off a strategic process to look for other buyers.


Musk, who has offered to take Twitter private at $54.20 per share, has stated that the $43 billion bid is his "best and final" offer. However, he revealed at TED2022 on Thursday that he is prepared with a "plan B" if the offer is formally rejected. He did not elaborate on the details of that plan.


Twitter shares YTD



Stay long Twitter: T3 Trading


T3 Trading chief strategist Scott Redler believes that investors should go long on Twitter, arguing that the company is currently an "undervalued" and "poorly managed" asset that has the potential to become a platform for the betterment of society.

"I don’t think Twitter should be a private company. I think that Elon should be on the board. It would’ve been better if he bought 14%, so he could’ve shaken the tree," Redler told "The Claman Countdown" on Thursday. "I think that the company could be run better. I think the features could be more updated. I think they could get more users. They could make more money. And that’s what Elon was trying to do somewhat."

"But now with this $54 bid, it just wasn’t enough, and now it's turning into a little bit of a mishmash where the market doesn’t believe it, the board doesn’t know what to do, and he might come in higher even though he said best and final, which is never really best and final," Redler adds. "So he’s created a precarious situation where it's going be interesting to see how it all falls out."


Twitter can, should improve its product: JPMorgan


JPMorgan analyst Doug Anmuth told clients that Musk's offer is "credible" and "represents a 54% premium from where TWTR was trading before he began acquiring shares." However, he acknowledges that it is also well below the company's March 2021 highs. The firm maintains an "overweight" rating on the stock.

"We believe the shares have significantly greater upside if management is able to execute on its plan to innovate on product, grow the user base ~20%, and build out direct response advertising," Anmuth said in a note on Thursday. "Accordingly, we do not expect the offer to be accepted by the board."


Downside risk to shares: Stifel


Meanwhile, Stifel analyst Mark Kelley believes the bid "sets a near-term ceiling on shares, detaches the company from fundamentals, and offers significant downside risk if Mr. Musk decides to abandon his offer or sell down his stake." Stifel has downgraded the stock from "hold" to "sell" and warns that a rejected bid could cause Twitter shares to "sell off dramatically."


Twitter could seek a consortium of investors: Jefferies


Jeffries, which maintains a "hold" rating on Twitter stock, notes that a sell-off of more than 20% on a rejected Twitter bid would "definitely present value to a strategic investor."

"In our view, this could be a positive outcome given TWTR would likely prefer a consortium of investors rather than be controlled by a single large owner," Jeffries analyst Brent Thill told clients Thursday.

Thill believes Twitter is likely looking for an offer of at least $60 per share.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
"Every Centimeter of Your Body Is a Masterpiece": The Shocking Meta Document Revealed
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
Beijing is moving into gold and other assets, diversifying away from the dollar
China Requires Data Centres to Source Majority of AI Chips Locally, For Technological Sovereignty
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
Jellyfish Swarm Triggers Shutdown at Gravelines Nuclear Power Station in Northern France
OpenAI’s ‘PhD-Level’ ChatGPT 5 Stumbles, Struggles to Even Label a Map
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
The World Economic Forum has cleared Klaus Schwab of “material wrongdoing” after a law firm conducted a review into potential misconduct of the institution’s founder
A Computer That Listens, Sees, and Acts: What to Expect from Windows 12
Bitcoin hits $123,000
Southwest Airlines Apologizes After 'Accidentally Forgetting' Two Blind Passengers at New Orleans Airport and Faces Criticism Over Poor Service for Passengers with Disabilities
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Russian Forces Advance on Donetsk Front, Cutting Key Supply Routes Near Pokrovsk
It’s Not the Algorithm: New Study Claims Social Networks Are Fundamentally Broken
Sixty-Year-Old Claims: “My Biological Age Is Twenty-One.” Want the Same? Remember the Name Spermidine
Saudi Arabia accelerates renewables to curb domestic oil use
The Billion-Dollar Inheritance and the Death on the Railway Tracks: The Scandal Shaking Europe
World’s Cleanest Countries 2025 Ranked by Air, Water, Waste, and Hygiene Standards
Denmark Revives EU ‘Chat Control’ Proposal for Encrypted Message Scanning
Perplexity makes unsolicited $34.5 billion all-cash offer for Google’s Chrome browser
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Taylor Swift announces 12th studio album on Travis Kelce’s podcast after high-profile year together
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Sam Altman challenges Elon Musk with plans for Neuralink rival
Trump and Putin Meeting: Focus on Listening and Communication
Instagram Released a New Feature – and Sent Users Into a Panic
China Accuses: Nvidia Chips Are U.S. Espionage Tools
Mercedes’ CEO Is Killing Germany’s Auto Legacy
US Postal Service Targets Unregulated Vape Distributors in Crackdown
RFK Jr. Announces HHS Investigation into Big Pharma Incentives to Doctors
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
×