Musk-Twitter Deal Could Be Repriced Lower if Musk Walks Away, Says Hindenburg

Short-seller Hindenburg Research warned on Monday that Elon Musk’s $44-billion (3,39,870 crore) supply to take Twitter non-public might get repriced decrease if the the world’s richest individual walked away from the deal.

“Musk holds all of the playing cards right here,” Hindenburg, which has a brief place on Twitter, mentioned in a report. “If Elon Musk’s bid for Twitter disappeared tomorrow, Twitter’s fairness would fall by 50 p.c from present ranges. Consequently, we see a big danger that the deal will get repriced decrease.”

Shares of the social media platform had been down as a lot as 4 p.c amid a broader market decline and touched $47.76 (roughly Rs. 3,690), their lowest degree since Musk made his $54.20 (roughly Rs. 4,190) per share supply in April, calling it “greatest and last”.

Twitter declined to remark.

“Interesting. Don’t overlook to look on the brilliant aspect of life typically!” Musk tweeted in a light-hearted response, to which the short-seller mentioned it expects Tesla shareholders will thank him if the deal is finished at a “extra cheap worth”.

Hindenburg mentioned the deal has seen various developments, from financing to board approval, which might have weakened Twitter’s place.

“We are supportive of Musk’s efforts to take Twitter non-public and see a big likelihood the deal will shut at a lower cost,” Hindenburg mentioned.

The short-seller mentioned Tesla chief government might stroll away paying the $1 billion (roughly Rs. 7,725 crore) breakup price and has an unbelievable leverage to renegotiate if he chooses to.

Last month, Twitter secured a $44-billion (3,39,870 crore) money deal to promote itself to Musk, who obtained over $7 billion (roughly Rs. 54,080 crore) in funding from high-profile traders, together with Oracle’s co-founder Larry Ellison and Sequoia Capital.

Angelo Zino, analyst at CFRA Research, mentioned there’s a excessive chance that the deal would shut on the said supply worth, besides if Musk has a change of coronary heart.