“A Twitter short seller gloated on Friday after Elon Musk pumped the brakes on his $44 billion bid to purchase out the social media site with a bizarre tweet that claimed negotiations were “on hold.“”
Short-seller Hindenburg Research had written Monday that Musk “holds all of the cards” within the deal and will threaten to walk away so as make the corporate’s board conform to a lower purchase price.
“Interesting,” a Musk responded on the time. “Don’t forget to look on the intense side of life sometimes!”
Then on Friday morning, Musk revealed that the deal was “temporarily on hold” as a consequence of concerns about “spam/fake accounts” — then insisted hours later that he was “still committed” to the buyout.
Hindenburg Research’s founder, Nate Anderson, coyly claimed victory on Friday after Musk’s waffling sent Twitter’s share price plummeting as much as 1 / 4 early Friday before it partially recovered.
“I’m looking on the intense side of life this morning,” Anderson wrote.
I’m looking on the intense side of life this morning
— Nate Anderson (@ClarityToast) May 13, 2022
Twitter shares were trading at $41.50 mid-day on Friday, which is 8% lower than the day before today and nearly 25% below Musk’s marijuana-themed buyout price of $54.20 a share — indicating Wall Street is skeptical the deal will undergo under its current terms, if in any respect.
Hindenburg has a record of writing scathing take-downs of what it believes to be over-valued tech corporations, including electric vehicles makers Nikola and Lordstown Motors, in addition to controversial health insurer Clover Health.
When Hindenburg released its initial report on Twitter this Monday, the investment group revealed it had taken a brief position in the corporate, meaning that it likely profited from Friday’s plunge.
“If Elon Musk’s bid for Twitter disappeared tomorrow, Twitter’s equity would fall by 50% from current levels,” Hindenburg wrote Monday. “Consequently, we see a big risk that the deal gets repriced lower.”
Elon Musk said he put his $44 billion Twitter bid “on hold” Friday. REUTERS
Hindenburg Research has a history of publishing takedowns on what it believes are overvalued tech firms.
“We’re supportive of Musk’s efforts to take Twitter private and see a big probability the deal will close at a lower cost,” Hindenburg added, arguing that the deal has seen various developments — including financing and board approval — which could have weakened the corporate’s position.
Hindenburg said Musk could walk away paying the $1 billion breakup fee and has leverage to renegotiate if he chooses to.
Wedbush Securities managing director Dan Ives said that Friday’s “Twitter circus show” means Wall Street investors consider Musk might be “negotiating for a lower deal price.”
Even ex-President Donald Trump appeared to echo Hindenburg’s position on Friday, writing, “There is no such thing as a way Elon Musk goes to purchase Twitter at such a ridiculous price.”
“If it weren’t for the ridiculous Billion Dollar breakup fee, Elon would have already been long gone,” Trump added in a post on his own Twitter alternative website, Truth Social.