Wall Street analysts have reflected on the latest developments concerning Elon Musk’s deal to take Twitter (NYSE:TWTR) public in a $44 billion deal.
This morning, Musk tweeted that the deal will only progress if Twitter can prove that bots represent less than 5% of the total users.
"My offer was based on Twitter's SEC filings being accurate. Yesterday, Twitter's CEO publicly refused to show proof of <5% (spam accounts). This deal cannot move forward until he does," Musk wrote in a tweet.
Tesla (NASDAQ:TSLA) CEO said yesterday that "you can't pay the same price for something that is much worse than they claimed.”
In response to Musk, Twitter said “it is committed to completing the transaction on the agreed price and terms as promptly as practicable.”
For many analysts, the bot issue is just a scapegoat that Musk is using to lower the price.
Jefferies analyst Brent Thill sees Twitter stock falling to as low as $22 in case Musk walks away.
“Musk’s intentions to explore a bid below $54.20 are more based on the recent market sell-off,” rather than the percentage of fake accounts on Twitter, Thill said.
CFRA analyst Angelo Zino lowered the price target to $44.00 per share from $54.00 to reflect the lower probability of Musk remaining committed to his $54.20 offer.
The analyst sees a potential for a lower revised offer of “at least 15%-20% as increasingly plausible (perhaps at $44.20 or $42.00 to maintain the 420).”
Wedbush analyst Daniel Ives also offered his thoughts on the latest developments.
“Twitter shares will be under pressure this morning again as the chances of a deal ultimately getting done is not looking good now and its likely a 60%+ chance from our view Musk ultimately walks from the deal and pays the breakup fee… If a revised deal does get done by Musk and Twitter, it will likely will be at a much lower price once negotiations take over and the diligence happens around Twitter DAU and algorithms hot button issues,” Ives told clients.
Twitter stock is down half a percent today.
By Senad Karaahmetovic