Elon Musk May Not Purchase Twitter for Agreed $44 Billion, Say Investors

According to investors, the implied probability of the deal closing at that price fell below 50 percent when Twitter shares hit $46.75.

Elon Musk May Not Purchase Twitter for Agreed $44 Billion, Say Investors

Photo Credit: Reuters

Elon Musk is worth $268 billion (roughly Rs. 20,709,03 crore) according to Forbes

Highlights
  • Elon Musk agreed to pay $44 billion to acquire Twitter
  • Twitter shares fell as much as 3 percent in afternoon trading
  • Musk on April 25 clinched a deal to buy the social media platform

The stock market took the view for the first time on Tuesday that it was unlikely that Elon Musk will acquire Twitter for $44 billion (roughly Rs. 3,37,465 crore), as he originally agreed.

The implied probability of the deal closing at that price fell below 50 percent when Twitter shares hit $46.75 (roughly Rs. 3,600), based on the $54.20 (roughly Rs. 4,180) deal price and Twitter's shares having closed at $39.31 (roughly Rs. 3,000) on April 1, the last trading day before Musk revealed he had amassed a stake in the social media company.

Twitter shares fell as much as 3 percent to touch a low of $46.50 (roughly Rs. 3,500) in afternoon trading.

Musk, the world's richest person and also the chief executive of electric car maker Tesla, on April 25 clinched a deal to buy the social media platform. Twitter said at the time that Musk secured $25.5 billion (roughly Rs. 197 crore) of debt and margin loan financing and was providing a $21 billion (roughly Rs. 162 crore) equity commitment.

Musk, who is worth $268 billion (roughly Rs. 20,709,03 crore) according to Forbes, had said he was not primarily concerned with the economics of Twitter.

"Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilisation. I don't care about the economics at all," he said in a recent public talk.

© Thomson Reuters 2022


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