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Twitter’s $54.20-a-share price tag could also be rising for Elon Musk


Here’s one other pot joke about Elon Musk’s purchase price for Twitter that the Tesla billionaire may not find so funny: It’s liable to getting higher and better daily.

The $54.20 that Musk initially agreed to pay for every share of Twitter — a “420” marijuana reference by Musk that amounts to a $44 billion buyout of the corporate — is effectively ticking up by greater than a penny per day because of a little-appreciated aspect of Delaware law, analysts tell The Post.

The additional payments — which amount to an additional $9 million per day when applied across all of Twitter’s outstanding shares — risk adding lots of of hundreds of thousands of dollars to Twitter’s already sky-high price tag, based on financial experts who’ve studied the case.

That could possibly be a minimum of a minor bummer for Musk — whose net value was recently pegged by Forbes at $260 billion — if a Delaware court orders him to undergo with the Twitter deal following a trial that’s set to kick off Oct. 17.

Specifically, Twitter could attempt to force him to pay out additional “pre-judgment interest” to make up for lost time between the day when the deal was originally presupposed to have closed and every time it actually goes through.

Pre-judgment interest could possibly be adding $9 million per day to Twitter’s sale price. Anadolu Agency via Getty Images

Sept. 15 was the earliest possible closing date under terms of the deal, which stipulated that it could close two days after it was approved by shareholders. Twitter investors voted to approve the deal by a large margin on Sept. 13. 

Delaware’s pre-judgment rate of interest accrues annually on the US Federal Reserve’s federal funds rate plus 5%. That signifies that Twitter’s price is effectively ticking up by about 1.1 cents a share per day, or $9 million, past Sept. 15, based on calculations that a hedge fund research analyst shared with The Post. 

If Judge Kathaleen McCormick were to side with Twitter order Musk to undergo along with his original agreement to purchase the positioning on Oct. 24, 39 days would have passed since pre-judgment interest began accruing. 

That theoretical scenario could add roughly $350 million to Twitter’s price tag. Or if the case got caught up in appeals and specific performance were eventually ordered on Dec. 1, pre-judgment interest would total about $700 million. If the legal battle stretches into 2023, it could reach greater than $1 billion.

It’s also possible that Elon Musk could win in court or negotiate a settlement with Twitter that doesn’t include pre-judgment interest. Alternatively, Judge McCormick could determine to begin the accrual of pre-judgment interest at a date aside from Sept. 15.

For the reason that pre-judgment rate of interest relies on the federal funds rate, rate of interest hikes by the Fed could also change the precise figure. 

Twitter declined to comment. An attorney for Musk didn’t reply to a request for comment.

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