14.04.2022 – So it’s true: Elon Musk wants to buy Twitter. It is quite possible that Musk will have to deliver a second helping. But if the hostile takeover attempt fails, the bears can rejoice. That is certainly possible. Because Twitter is not just any company. It is an important opinion channel for the woke cultural chic in the USA. That’s why the resistance of the good, better and best people in the American power structure is likely to be enormous.
The richest man in the world is offering $54.20 per share for Twitter, or just under 50 euros. He says the company has extraordinary potential, which he will leverage. Musk’s offer is 54 percent higher than the price at the end of January. Congratulations to all traders who had the right nose. Twitter is now worth around 43 billion dollars. Musk can afford it: his assets amount to 260 billion dollars, and he has around 80 million followers on Twitter. In the daily chart, you can see that traders have already taken profits. And that the current offer is probably not enough for the stock market – the price was already higher when the 9 percent share was announced on April 4. If Musk follows suit, it will go north again. If not, the gap will be closed.
And that brings us to the opportunities for the bears. Twitter is not just any company. It is the mouthpiece of the left-wing cultural chic, which would probably lose an important opinion channel with Musk’s purchase. For example, Twitter has problems with former President Donald Trump’s freedom of expression. However, Twitter turns a blind eye to tweets from Islamists or Antifa, the Republican opposition criticizes. This is precisely why Trump launched his own social media channel; and also because of the annoying political one-sidedness, Twitter’s share price had plummeted sharply in recent months.
Musk is too independent
At Twitter, the East and West Coast establishment is likely to raise heaven and hell to stop Musk. Because he’s simply too independent – and unabashedly represents right-wing positions. For example, after Tesla’s plants were closed as a result of the lockdown, he discussed special arrangements with authorities. He also disapproved of the interim curfews in the People’s Republic of California. Specifically, “To say they can’t leave their house and they will be arrested if they do is fascist. That is not democratic, that is not freedom.” Outrageous.
Salute to Sleepy Joe
Musk also has a problem with Joe Biden. For example, the entrepreneur does not like the planned billionaire tax at all. In addition, Musk was annoyed that the U.S. president did not formulate any congratulations to Musk’s space company SpaceX after it made the first space flight with a purely civilian crew. Elon Musk’s comment, “He’s still asleep.” With which he took up the ball from Trump, who had repeatedly referred to Biden as “Sleepy Joe” during the election campaign. He also served on Trump’s economic council. Musk himself has described himself as “half Democrat, half Republican.” He is independent and “politically moderate,” he announced on Twitter in 2018. Very unusual for an entrepreneur from the eco-correct e-industry.
Threat of class action lawsuit
Twitter’s own management is also likely to be spectral of Musk, who announced plans to turn the San Francisco headquarters into an asylum for the homeless. Where will the millionaires have to move to then? In addition, the Dems want to strengthen the power of the unions – Musk wants nothing to do with that. Moreover, Musk is in legal trouble. According to a class action lawsuit filed Tuesday in a federal court in New York, Musk already reached a Twitter shareholding of five percent on March 14, which required him to make his holdings public by March 24. However, this did not happen until April 4. During that period, Musk had further increased his stake to more than 9 percent.
The conclusion from all this: It is quite possible that Musk will drop Twitter again as soon as it becomes too colorful for him. Presumably hedged with put options, he could back out of the deal. This would send the share price plummeting south. So keep an eye on the real-time news – the drama could be prolonged by several acts. Whether long or short – Bernstein Bank wishes good luck!
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