Musk Puts Forth All-Cash Offer to Buy Twitter

In an unexpected turn of events, the CEO of Tesla (TSLA), Elon Musk, has made an all-cash offer to buy Twitter (TWTR) for $54.20 per share or $43 billion. TWTR stock was up more than 12% in Thursday’s pre-market trading session.

The offered price represents a 54% premium over TWTR stock price as of January 28, 2022, which is a day before Musk started investing in Twitter, and a 38% premium from the time his investment became public.

Musk has revealed his intentions to transform Twitter into a private company. Also, he sees “extraordinary potential” in the company, which he plans to unlock.

In an email to Twitter’s Chairman, Bret Taylor, Musk said, “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy. However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form.”

“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” he added.

Wall Street’s Take

Recently, Wedbush analyst Daniel Ives assigned a Buy rating to Tesla with a price target of $1,400, implying 36.9% upside potential from current levels.

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 15 Buys, five Holds, and six Sells. Tesla’s average price target of $1,005.64 implies 1.6% downside potential. Shares have gained 39.6% over the past year.

Hedge Fund Trading Activity

TipRanks’ Hedge Fund Trading Activity tool shows that the confidence of hedge funds in Tesla is currently Very Negative, as the cumulative change in holdings across all 24 hedge funds that were active in the last quarter was a decrease of 2.4 million shares.

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