Analyst on Musk’s Twitter provide: ‘No board in America goes to take that quantity’

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Elon Musk provided to purchase Twitter (TWTR) for $54.20 per share in a filing made public Thursday, calling it his “greatest and last provide.”

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However the Tesla (TSLA) CEO should rethink that supply if he’s severe about taking up the social media firm, in line with one analyst.

“Nobody believes that is the ultimate worth. No board in America goes to take that quantity,” stated Jefferies analyst Brent Thill.

Twitter shares jumped 4% on information of the all-cash provide, earlier than falling within the afternoon session Thursday. Within the amended SEC submitting, Musk wrote his provide to pay $54.20 per share amounted to a 54% premium on the inventory, in comparison with its worth the day earlier than Musk started investing within the firm.

However in feedback at TED2022 Musk solid doubt on his plan to take Twitter personal, saying, “I’m undecided I’ll really have the ability to purchase it.”

“The intent is to retain as many shareholders as is allowed by the legislation in a non-public firm,” he stated. “So, it is undoubtedly not from the standpoint of let me work out the way to monopolize or maximize my possession of Twitter.”

Musk added that his transfer was not about discovering a approach “to earn money.”

“I don’t care concerning the economics in any respect,” he stated.

No matter Musks’ motives, Thill stated his provide merely doesn’t add up for Twitter’s board, partially as a result of the billionaire hasn’t laid out how he plans to “rework” the corporate. Thill additionally alluded to Musk’s use of the quantity “420,” a preferred reference to marijuana, as “borderline unprofessional.”

“It isn’t going to be something with a 420, OK, so take that out. Carry the bid to $60 after which put collectively a constructive construction round how they might run it,” Thill stated. “Then possibly, possibly, however that is what it’s going to take.”

Twitter publicly acknowledged the takeover provide Thursday, saying in a statement that it plans to “rigorously evaluation the proposal to find out the plan of action that it believes is in the very best curiosity of the Firm and all Twitter stockholders.”

However behind the scenes, the board reportedly views the provide as “unwelcome,” suggesting it’s prepared to place up a struggle, according to The Information.

The potential battle comes simply 5 months after new CEO Parag Agrawal assumed management from Twitter Co-founder Jack Dorsey final fall. Thill stated Musk’s provide might open the door to different bidders within the social media firm, though Washington’s elevated antitrust scrutiny on large tech companies will probably stop any deal from getting finished.

“It is laborious as a result of the federal government goes to say no to any giant transaction even when the remainder of tech needed to do that,” Thill stated. “It’s laborious to see who the subsequent logical participant might be.”

Akiko Fujita is an anchor and reporter for Yahoo Finance. Observe her on Twitter @AkikoFujita

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