NEW YORK, May 11 (Reuters) – U.S. stock markets on Tuesday reflected for the first time that investors believe Elon Musk is unlikely to buy Twitter Inc for $44 billion, as he initially agreed.
Twitter shares fell as low as $46.75 on Tuesday. Based on Musk’s proposed acquisition price of $54.20 per share and Twitter’s closing price of $39.31 on April 1, this implies that Musk’s $44 billion acquisition of Twitter is less than 50% likely.
April 1 was the last trading day on which Musk disclosed his 9.1% stake in Twitter. Twitter shares fell as much as 3 percent to $46.50 on Tuesday, before closing at $47.26.
U.S. short seller Hindenburg Research said on Monday that Musk’s deal to buy Twitter faces “significant risk of being repriced.”
The agency believes that Musk has all the initiative, and if Musk’s bid for Twitter disappears, Twitter’s stock price will fall by 50% from current levels. Therefore, they believe the deal is likely to be completed at a lower price.
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