Twitter: Musk To The Rescue

 

  • Elon Musk acquires more than 9% of Twitter.
  • The company has long struggled with growing ad revenues inline with Facebook in part due to executives not actually using Twitter.
  • The stock is cheap at 5x forward EV/S targets with the potential for the business to accelerate growth to match the influence of the social platform.
  • The potential exists for Musk to buy the stock at a higher price, but that isn't the base case here.
  • This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »
The biggest news of the day was Elon Musk acquiring 9.2% of the struggling social media site. The news that Musk apparently wants to take a crack at improving Twitter (NYSE:TWTR) is an encouraging move considering the fears of him starting a competing platform in the lines of Truth Social (DWAC) being built by Trump. My investment thesis remains very Bullish on the stock despite the initial 25% pop on the move by the CEO of Tesla (TSLA).

Read the full article on Seeking Alpha. 

Disclosure: Long TWTR. Please review the disclaimer page for more details. 

Update - Apr. 21

Not sure what a tender offer will do b/c he can't close the deal with the poison pill in place. In addition, the biggest issue with the offer from Musk was the valuation, not whether or not he could line up financing as the richest man in the world. 

-Elon Musk will explore a potential tender offer for Twitter (NYSE:TWTR), having secured $46.5 billion committed financing for the deal.

-Musk's filing says entities related to him have received commitment letters committing to about $46.5 billion to finance the offer.
-That financing comprises a debt commitment letter from Morgan Stanley and other institutions covering $13 billion in loans; a separate debt commitment letter from Morgan Stanley and others for $12.5 billion in margin loans; and an equity commitment letter from Musk for equity financing of $21 billion.


Update - Apr. 14

Inadequate proposal by Musk. The stock traded at $70 just last year. 

-Tesla (TSLA) founder Elon Musk is offering to buy Twitter (NYSE:TWTR) for $54.20 per share in cash, Bloomberg reported Thursday.

-Twitter shares are up 12% in premarket trading.

-"Twitter has extraordinary potential. I will unlock it," Musk said in an amended 13-D filing.

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