Elon Musk’s Epic Twitter Deal and Its Impact on Tesla Shares

during the last week Elon Musk who is the CEO of the company Tesla The world’s largest electric car maker Create a buzz in the market by announcing a move to buy. Tweet famous social media company As previously agreed in April at a valuation of $44 billion at $54.2 per share. As a result, Twitter’s share price immediately jumped 22% at $52 per share. After earlier reports of uncertainty surrounding the Elon Musk deal, Twitter sued and protracted for months. The announcement of the acquisition of Twitter this time has caught the eye of investors in the market very much. He will have until October 28 to acquire Twitter if he wants to avoid a court ruling that Twitter has filed for breach of contract.

Investors are questioning where Elon Musk will lead Twitter. and how it will affect other businesses, which analysts expect Its aim is to turn Twitter into a Super App that offers multiple functions within one app (all-in-one service) such as messaging. Social media platforms and payment services close to WeChat oh A decade He tweeted, “Buying Twitter is a catalyst to create X, the everything app,” the same day the deal was announced. Twitter format content can be similar to TikTok which is a short video app that is gaining popularity all over the world as well

  • flashback Start of a big deal

The story begins in early 2022 when Elon Musk buy shares gradually Tweet until the share of 5%, but he did not inform the United States Securities and Exchange Commission (SEC) within the specified time by continuing to buy shares He has now become the No. 1 shareholder with 9.55% (as of October 6) During at that time, CEO Parag Agrawal invited him to join the board, which was expected to prevent a takeover of the company. Elon Musk made an offer to buy the entire company and take it off the stock exchange for $ 44 billion on April 14, noting the potential of the Twitter platform and wanting to support freedom of speech (free speech), which the company received the offer

However, in May, he announced the postponement of the purchase. Tweet As a result, its share price fell by about -20% in one day, indicating a problem with spam and fake accounts in the system, which the company says does not exceed 5% of its daily earnings (Monetizable Daily Active). Users), who believe that fake and spam accounts are more than 5%, demand additional evidence. It wasn’t until July that the deal was canceled, prompting Twitter to file a lawsuit, which Bloomberg estimates has a 70% chance of Twitter winning.

Before the deal was announced, Twitter’s share price was below $37, which is well below the offer price. which after announcing the deal’s failure Shares continued to fall to around $32 per share, with Twitter’s share price recovering since the company announced it would file a lawsuit. Elon Musk And most recently, it has bounced back over $50 in response to news of the buyback deal.

source: Bloomberg

  • Impact on Tesla shares and investor concerns

A share price of Tesla Instead, it fell back on investor concerns on many issues. from those investors While the Twitter acquisition may not be directly related to Tesla, the deal’s $44 billion value came from a $25.5 billion loan, $12.5 billion of which was a personal loan that could use Tesla shares as collateral and personal funds Elon Musk Another $21 billion, which may necessitate the sale of Tesla shares and will inevitably affect the share price. Analysts estimate he may have to sell $2 billion to $7 billion worth of Tesla shares, which he sees as using assets from booming businesses like electric cars for an almost unprofitable social media business. For example, he sold about $8.5 billion of Tesla shares in April after announcing that he had bought Twitter, and another $6.9 billion in August sent Tesla shares down.

although now Tesla Takes three-fourths of the US electric vehicle market share, but the company faces economic uncertainty. high inflation interest rates raise supply chain problems and fierce competition in the electric vehicle market Some analysts attributed the lack of new models to ongoing quality problems. This led some investors to worry that acquiring Twitter would also attract the attention of Tesla CEO Elon Musk.

Elon Musk's Epic Twitter Deal and Its Impact on Tesla Shares
source: Bloomberg

All in all, the purchase deal Tweet a famous social media company Elon Musk It is an epic closely watched by market participants. with a value of up to US$44 billion including changes to Twitter’s company structure and business operations, and its impact on Tesla Two of the company’s market leaders in their own business and major Market Capitalization companies go under the leadership of one person. The movement of the share price can affect the entire market. So how will this deal pan out? It is still an issue that must be pursued.

Sources: Bloomberg, CNBC, Reuters, nytimes, electrek.

Information, articles, analysis and forecasts…. and all opinions contained in this report are made on the basis of the best sources of information obtained and considered reliable, but the accuracy, completeness and authenticity of such information cannot be guaranteed. The opinion expressed in this report is based on reasonable and careful consideration. and subject to change without notice All articles, analyzes and expectations are displayed. Any use contained in this report is at the user’s own risk and at the user’s sole discretion.

Contact for more details at TISCO Asset Management Co., Ltd. or TISCO Contact Center Telephone: 0 2633 6000 press 4, 0 2080 6000 press 4 and www.tiscoasset.com or the TISCO My Funds application.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.