Twitter shares jump 5% on reports it could accept Elon Musk’s bid as early as Monday
Twitter shares jumped more than 3% on reports the company is nearing a deal with Elon Musk that could be announced as soon as Monday.
Musk earlier this month offered to buy Twitter for $54.20 a share, or about $43 billion. The social media company had been expected to decline a deal and had adopted a so-called poison pill to fend off a potential hostile takeover. However, Twitter became more receptive to a bid after Musk revealed he secured $46.5 billion in financing.
The company’s board met Sunday to discuss Musk’s financing plan for his proposed bid, a source close to the situation told CNBC.
It’s unclear what a final deal could look like, and Reuters reported Monday that an agreement could still fall apart. Twitter has not been able to secure a “go-shop” agreement yet, which would allow it to look for other bids once it signs an accord, according to Reuters. The company could still accept another bid if Musk pays a break-up fee, it added.
Wall Street was likely to view the news of Twitter’s openness to a bid “as the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix,” Wedbush analyst Dan Ives said in a Sunday note.
“I think they almost have to” take the deal, CNBC’s Jim Cramer said Monday on “Squawk on the Street.” Twitter is set to report first-quarter earnings Thursday, and some, including Cramer, expect the company to post disappointing results.
“Locking a deal up today or tomorrow may sound pretty appealing for someone who knows they are in possession of bad news,” Gordon Haskett said in a Monday note.
Twitter declined to comment. Tesla shares were down more than 1% in the morning.
Musk, an avid Twitter user, has contended it needs to be “transformed” into a private company so it can become a forum for free speech. He’s also said that Twitter’s board members’ interests “are simply not aligned with shareholders” and that the board “owns almost no shares” of the company.